New User   Login      
Tax Management India .com TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (7) TMI 274 - ITAT KOLKATA

2016 (7) TMI 274 - ITAT KOLKATA - TMI - Disallowance of claim for the expenditure on account of major repairs & maintenance - Assessee Company engaged in the business of manufacturing & selling of cement - Held that:- As major repair expenses were regarded as revenue in nature in the earlier years. Therefore relying on the same as stated in the aforesaid decision of this Hon’ble Tribunal in assessee’s own case, we find no reason to interfere in the order of learned CIT(A) directing the AO to all .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

)-I/200-11 dated 15.03.2013. Assessment was framed by DCIT, Circle-4, Kolkata u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) vide his order dated 21.12.2010 for assessment year 2008-09. 2. Sole issue raised by Revenue is as regards that Ld. CIT(A) erred in deleting the disallowance of claim for the expenditure on account of major repairs & maintenance for ₹ 247.63 lacs. For this, Revenue has raised the effective ground:- 1. That on the facts and circumstan .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

and selling of cement. During the year assessee has claimed major repair expenses for an amount of ₹ 270.41 lacs by debiting the profit and loss account. This major repair expense was in addition to normal repair and maintenance expenses of ₹ 433.68 lacs incurred by the assessee. During the assessment proceedings the assessee submitted that the major repair expenses represents and include the cost of three gearboxes which were replaced during the year. The details of the gearboxes ar .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ring in nature so it cannot be claimed as deduction by showing as revenue expenditure. Accordingly the AO disallowed the claim of the assessee for the major repair expenses of ₹ 247.63 lacs and added to the total income of the assessee. 4. Aggrieved, assessee preferred an appeal to Ld CIT(A) who deleted the addition made by the AO by observing as under 3.4 Similar issue also came up in the case of the appellant for A.Y 2007-08 wherein my predecessor in appeal No.200/CIT(A)-IV/2009-10 dated .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Shri Debasish Roy, Ld. Departmental Representative appearing on behalf of Revenue. 5. We have heard rival submissions of both the parties and perused the materials available on record. Before us Ld. DR fairly relied on the order of AO and he left the issue to the discretion of the Bench. On the contrary, Ld. AR relied on the order of Ld CIT(A). At the outset, we observed that similar issue in assessee s own case for the AYs 2006-07 and 2007-08 in ITA No. 1396 & 1397/Kol/2011 dated 14.10.201 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

out components and certain capital assets or group of assets. According to him, these worn out parts are in the context of capital asset where these are used and also form a small fraction of the total value of corresponding capital asset in each case. He certified the expenses and summarized section wise as under: 1. Lime Stone Captive Quarry ₹ 27.15 lacs 2. Crushing Section ₹ 45.53 3. Raw Mill Sections Rs.224.90 4. Kiln ₹ 79.89 5. Coal Mill ₹ 25.10 6. Clinker Grinding S .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

company in FY 2006-07 relevant to AY 2007-08 undertook the overdue repairs and maintenance for plant and machinery and repair and replacement of internal control purpose was started. The assessee company has not increased in the rated capacity of any of the plant/equipment by virtue of this repair and maintenance. Factually, the assessee has carried out repairs and maintenance, as is evident from the above discussion. In similar circumstances, Hon'ble Bombay High Court in the case of CIT Vs. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

pairs should not bring into existence nor obtain a new or different advantage. v) The quantum of expenditure nor the fact that in the process of repairs, there was substantial replacement of the parts of machine or ship is decisive of the true nature of the expenditure. vi) The original cost of the asset is not at all relevant for ascertainment of the true nature of the expenditure on repairs. vii) The replacement cost of the asset may however, at times may be used as indicator of the true chara .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version