TMI Blog2018 (6) TMI 1459X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 - Sh. Rajendra, Accountant Member And C. N. Prasad, Judicial Member For The Revenue : Shri Ram Tiwari-DR For The Assessee : Shri Jayesh Dadia-AR Order u/s. 254(1)of the Income- tax Act , 1961(Act ) PER RAJENDRA, AM Challenging the order of the CIT(A)-8, Mumbai, dated 28. 09. 2016 the Assessing Officer (Assessing Officer) has filed the present appeal. Assessee company, engaged in the business of manufacturing of polymer compounds and trading in synthetic rubber, petroleum, resins and chemicals, filed its return of income on 18. 09. 2012 declaring total income of ₹ 14. 80 crores. The AO completed the assessment u/s. 143(3) of the Act, on 31. 03. 2015 determining its income at 15. 31 crores. 2. First ground of appeal is about treating the expenditure of ₹ 11. 23 lacs as revenue expenditure. It was agreed by the representatives of both the sides that the issue stands covered by the order of the Tribunal (ITA 1725/Mum/2015 ITA 1028/Mum/2015-A. Y. 2011-12, dated 15. 11. 2016). We are reproducing the relevant portion of said order and it reads as under para 2 to 7 copy. 2. The first issue in this appeal of Revenue is against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 2, 92, 889/- was also paid. Replacement or repair of old wall cannot lead to a conclusion that new capital assets came into existence. I refer here to the decision in the case of New Shorroc Spg. Mfg. Co. Ltd. v. VIT so ITR 338 (Bom); Addl. CIT v. Desai Bros -. 108 ITR 14 (Guj); CIT v. Chowgule C0. (P) Ltd. 81 Taxman 384/214 ITR 523(Bom); CIT v. Saravana Sp. Mills (P) Ltd. 163 Taxman 201215293 IT'R 201(SC); CIT v. Janakiram Mills Ltd. 275 ITR 403(Madras); CIT v. Madras Auto Service (P) Ltd. 99 Taxman 575 (SC); CIT v. Manohar Lal Him Ltd. 219 Taxman 161; CIT v. Jawahar Mills Ltd. 226 ITR 230 - Madras High Court. In View of the above, the expenditure of ₹ 32, 54, 413/- made by the appellant company is treated as revenue expenditure. Thus, the addition of ₹ 30, 75, 581/- made by the AO is deleted. Aggrieved Revenue is in second appeal before Tribunal 4. We find that the assessee has carried repair to the existing factory building at Vapi and to strengthen the beam of the existing building. The assessee also carried out repair of boundary walls of factory at Nasik. Once this is repair, the expenditure is Revenue in nature, hence, we ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brought any material on record to justify that the appellant company has not disclosed work in progress. The finding of the AO that not having any raw material/semifinished goods in the machinery itself in the manufacturing process at any particular point of time cannot be ruled out is not based on any reasoning. Therefore, the adhoc disallowance of 1% of raw materials deployed for manufacturing of finished goods which has been made by the (AC) and which comes to ₹ 11, 80, 812/- is deleted. Aggrieved Revenue is in second appeal before Tribunal. 10. We have considered the submissions of both the sides and find that the AO has made adhoc disallowance of 1% on raw material and CIT (A) deleted the same as there is no evidence. We find no infirmity in the order of CIT (A) and hence deletion is confirmed. This issue of Revenue s appeal is dismissed. 4. Respectfully following the said we decide the second ground of appeal against the AO. 5 . Last ground of appeal is about deleting the addition of ₹ 8. 91 lacs on account of foreign travel expenses. We would like to reproduce the portion of the letter, dated 03. 02. 2015 addressed to the AO and same rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y has purchased material worth Z 9. 24 crore from Rishichem Mideast Ltd situated in Dubai. These Dubai trips were also for the purpose of the business. Kindly note that similar expenses incurred on Dubai trips in past have always been allowed including immediate preceding assessment year. ₹ 1, 42, 379/- was spent on Thailand trip where Mr. Aditya Kapoor and Mr. Vinay Acharya, senior executive of the company have gone to attend Thailand Rubber Expo. You will appreciate that attending such conference related to business are necessary and must for latest update and therefore it has been incurred wholly and exclusively for the purpose of business. ₹ 5, 26, 605/ - was spent on Shanghai trip was again incur red for at tending conference in Shanghai China Coat show. This again related to the business of the Assessee Company. ₹ 4, 84, 400/- was incurred on trip to Sau Paulo, Brazil where Mr. Arvind Kapoor attended International Rubber Conference. Relevant documents in this connection are enclosed. Thus, the trip to Sau Paulo, Brazil was wholly and exclusively for the purpose of business of the Assessee Company. ₹ 2, 49, 565/- was incurred on trip ..... X X X X Extracts X X X X X X X X Extracts X X X X
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