TMI Blog2014 (12) TMI 1156X X X X Extracts X X X X X X X X Extracts X X X X ..... g under the unity and control of same management with common funds etc. See Rama Synthetics India Ltd. Vs. CIT reported in (2009 (9) TMI 635 - Delhi High Court ) & CIT Vs. Priya Village Roadshows Ltd. reported in (2008 (5) TMI 142 - PUNJAB AND HARYANA HIGH COURT). CIT(A) is justified in deleting the disallowance of ₹ 31.2 lakhs - Decided in favour of assessee. - ITA No. 5179/Del /2012, C.O No. 439/Del/2012 - - - Dated:- 12-12-2014 - Shri J. S. Reddy And Shri George George K.,JJ. For the Appellant : Shri Parwinder Kaur, Sr.D.R. For the Respondent : Shri Pradeep Dinodia, Advocate And Shri R.K. Kapoor, CA. ORDER Per Shri George George K, JM: 1. This appeal by the Revenue and cross objection by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ening of assessment. The CIT(A) after examining the details of expenditure held that the expenditure incurred of ₹ 31.20 lacs on salary, wages stores, spares and travelling was revenue in nature. By incurring such expenditure appellant has not created any asset which is capital in nature. The expenditure was incurred for improvement of product and enhancement of its existing business in the line of chemical manufacturing under the unity and control of same management with common funds. Hence, the disallowance made by the Assessing Officer was not justified and same is are allowed as revenue expenditure . The CIT(A) followed the judgment of the Hon ble jurisdictional High Court in the case of Indo Rama Synthetics (I) Ltd. Vs. CIT repo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... off in P L account. This fact was duly explained by the Tax Auditors in Form 3CA. 8. The Assessing Officer had treated the expenditure of ₹ 31.2 lakhs as capital nature holding that the assessee has not given specific reply as to the nature of the expenditure. The assessee vide its letter dated 09.08.2011had furnished details of these expenditure to the AO, which clearly established that the expenditure comprises of various expenses, which are revenue in nature. 9. Similar issue was examined in the case of DCM Shriram Industries Ltd. (assessee had merged with DCM Shriram Industries Ltd.) wherein expenditure incurred on a new project was earlier charged to CWIP and on abandonment of the project, the assessee has claimed the expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missed Special Leave Petition filed by the Department against the judgment of Hon ble Delhi High Court. ii). CIT Vs. Priya Village Roadshows Ltd. In this case, the Hon ble Delhi High Court has held that expenditure incurred on feasibility study for starting new business in the existing line of the assessee where there is common administration common fund and unity of control the expense is of revenue in nature. The High Court has followed various other decisions on this issue including the Modi Industries Ltd. decision. 11. The facts of instant case is identical to the facts of above cited case. The assessee has incurred expenditure of ₹ 31.20 lacs on salaries, wages, stores sapares, travelleing etc. No expenditure has been ..... X X X X Extracts X X X X X X X X Extracts X X X X
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