TMI Blog2015 (5) TMI 651X X X X Extracts X X X X X X X X Extracts X X X X ..... r such a state of affairs prevailing in that State over which he had no control with an expectation of resuming the business. This is not a case where the assessee himself is embroiled in a dispute with his labourers and in the process, has decided to declare a lockout expressing its intention not to run the business. Thus,the Tribunal below rightly granted depreciation in favour of the assessee - the question in the present case too has to be and is answered in the affirmative - Decided against the revenue. Expenditure on filling up the pond, leveling of the low land - revenue v/s capital expenditure - Held that:- In this case the expenditure was made for bringing into existence an advantage for the enduring benefit of the business of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is still running up to the present date and the further fact is that the word user being given a wider meaning to include not only active user but passive user, the confirmation of the orders of the Assessing Officer as well as the Commissioner of Income Tax (Appeals) by the Tribunal being the last fact finding authority by ignoring relevant facts and on the contrary taking irrelevant facts into consideration is perverse? ii) Whether on the facts and in the circumstances of the case the Hon'ble Tribunal erred in law in not granting the petitioner's claim of ₹ 15.69 lacs incurred for filling up the pond, leveling of the low land as a revenue expenditure where no enduring benefit had accrued to the petitioner and when there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1994) 206 ITR 682 was squarely applicable to this case in rejecting the contention of the appellant that there was passive use of the plant and machinery of the mills for depreciation to be allowed in the lock-out period. In our view the decisions relied upon by Mr. Sen support his contention. In Hindusthan Gas Industries Ltd. this court in allowing the claim of depreciation of diesel generating sets leased out for the period when the lessee's factory premises was under lock-out had taken the following view:- The business of the assessee-company was to lease out generating sets. The lease in the instant case expired on 30-11-1974 but the assessee-company did not get back the diesel generating set because of the lock-out declared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd order situation, the assessee did not abandon its business but suffered loss for such a state of affairs prevailing in that State over which he had no control with an expectation of resuming the business. This is not a case where the assessee himself is embroiled in a dispute with his labourers and in the process, has decided to declare a lockout expressing its intention not to run the business. Thus, taking into consideration the circumstances of the present case, we are of the view that the Tribunal below rightly granted depreciation in favour of the assessee. Our attention was not drawn to any finding to indicate that the suspension of work was actuated by any malice. The plant was lying ready for use. Applying the aforesaid de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the same the shape of land as capital in nature. Mr. Sen submitted the expenditure was incurred by the assessee wholly and exclusively for the purpose of business in as much as the result of it enabled the assessee to earn rental income. He relied upon the case Sassoon J. David and Co. P. Ltd. Vs. CIT reported in (1979) 118 ITR 261 (SC) for the view taken by the Supreme Court with regard to the relevant provisions in the Act of 1922, which is as follows:- In order to claim deduction under s. 10(2)(xv) of the Act, an assessee has to show that the expenditure in question, (i) was not an allowance of the nature described in any of the cls. (i) to (xiv) of s. 10(2), (ii) was not in the nature of a capital expenditure or personal expen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TR 228 (Cal) also cited by Mr. Sen, this court had expressed the following view:- If the expenditure is made for acquiring or bringing into existence an asset or advantage for the enduring benefit of the business it is properly attributable to capital and is of the nature of capital expenditure. If on the other hand it is made not for the purpose of bringing into existence any such asset or advantage but for running the business or working it with a view to produce the profits it is a revenue expenditure. We find on the facts and circumstances in this case the expenditure was made for bringing into existence an advantage for the enduring benefit of the business of the assessee, and therefore, the same was capital in nature. In the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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