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TMI Blog2014 (12) TMI 1156X X X X Extracts X X X X X X X X Extracts X X X X ..... in deleting a sum of Rs. 31,20,439/-. In the assessee's cross objection, all the grounds raised relates to the issue of validity of reopening of assessment u/s 147 of the I.T. Act. 3. We shall first take up for adjudication the Revenue's appeal. The brief facts of the case are as follows. The assessment u/s 143(3) was completed vide order dated 24.11.2006, fixing total income of Rs. 6,98,23,196/-. The assessment was reopening on 30.08.2011 by issuance of notice u/s 148 of the Act and reassessment u/s 143(3) r.w.s. 147 of the Act was completed on 30.08.2011. In the reassessment, the AO made an addition of Rs. 31.20 lakhs. The assessee had claimed deduction of an amount of Rs. 31.20 lakhs as Revenue expenditure. These expenses were incurred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthorities and relied on the findings of the CIT(A). 6. We have heard rival submissions and perused the material on record. The details of expenditure claimed by the assessee as Revenue's expenditure are as under: Particulars Amount Cost of stores consumed 11.73 Wages & Salaries 15.13 Cost of steam & power 2.80 Misc. expenses 1.54 Total 31.02 7. The above expenditure was incurred in the earlier years for improvement/diversification of assessee's chemical products including the new products in the same line. The entire expenses were of revenue in nature, being incurred on cost of stores consumed/wages & salary/power and other miscellaneous expenses. The assessee had treated the aforesaid expenditure as CWIP in its annua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). CIT Vs. Priya Village Roadshows Ltd. reported in (2011) 322 ITR 594 (Del). 10. Now let us examine the facts of the Hon'ble jurisdiction High Court judgments. i). Indo Rama Synthetics India Ltd. Vs. CIT In this case, the Delhi High Court was dealing with the issue of expenditure of Rs. 64.48 lacs incurred on expansion of business which plans were later abandonment. The expenditure was incurred in different assessment years and on abandonment of the project the expenditure was claimed as revenue in nature. The claim of the assessee was disallowed. However, the Delhi High Court following its earlier judgment in the case of Modi Industries Ltd. 200 ITR 341 has held the expenditure as revenue in nature. It has been held that since the expe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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