Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

DCIT, Circle-4, Kolkata Versus M/s Kalyanpur Cements Ltd.

2016 (7) TMI 274 - ITAT KOLKATA

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 allow the expenditure incurred on account o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 circumstances of the fact that Ld. CIT(A) erred in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ssessee 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 are as under:- (i) Gear Box Model-KDA500 & .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s 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 29.06.2011 has held that the entire exp .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

resentative 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 14.10.2014 was decided in favour of assessee by t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s 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 Section ₹ 60.24 7. Slag Grinding Se .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

7-08 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. Chowgule & Co. Pvt. Ltd. (1995) 214 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r 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 character of the expenditure. If the expendit .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| 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