2014 (10) TMI 225

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..... ction was concluded on 31.07.1992 and the manufacturing activity commenced immediately thereafter. In the returns submitted by the respondent, for the assessment year 1993-94, the expenditure incurred for establishing Green Belt was shown and the corresponding depreciation under the relevant provisions of law was claimed. The Assessing Officer refused to treat it as capital investment, much less as part of plant and machinery and disallowed depreciation, which was claimed at Rs. 6,12,1,2,792/-. Aggrieved by that, the respondent approached the Commissioner (Appeals). Through his order, dated 22.05.1998, the Commissioner confirmed the view taken by the Assessing Officer. Thereupon, the respondent filed the I.T.A. before the Tribunal. Through .....

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..... f fertiliser factories, arrangement of Green Belt, of a particular area and description is a prerequisite and in that view of the matter, the Green Belt deserves to be treated as part of plant and machinery. He contends that even if for any reason, the Green Belt cannot be treated as part of plant and machinery, the expenditure incurred therefor deserves to be capitalised and that the view taken by the Tribunal in that regard warrants no interference. As a measure to control pollution, Laws are enacted ordaining that whenever an industry that has the potential of polluting the air or ground water, are established, the concerned management shall be under obligation to provide a Green Belt of the specified area, as a measure to control the d .....

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..... xpenditure or plant and machinery. The second is that since the expenditure, though revenue in nature, was incurred before the commencement of the business/production, the said amount can be capitalised. The Tribunal did not stop at that. It directed that the same be treated under the heading of plant and machinery. The relevant paragraph reads: Keeping in view the factual matrix of this case and the above proposition laid down by the honourable apex court, we are of the considered opinion that the expenditure in question is to be allocated to the asset and capitalised under the plant and machinery and depreciation allowed at the admissible rates on the same. Order accordingly. As regards the first part of the ultimate direction issued b .....

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