2020 (11) TMI 407

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..... 2. The Ld. C1T(A) erred in upholding the disallowance made by Ld. AO of expenditure on account of Stamp duty and mortgage charges of Rs. 21,31,120/- and Rs. 8,30,920/- respectively on the ground that these are nonrecurring expenditure made towards acquisition of assets and hence capital in nature; 3. The Ld. CIT(A) erred in not appreciating the fact that during the year there were no additions made in the capacity of Fixed Assets/ lease assets." 3. The solitary issue in this appeal relates disallowance of revenue expenditure incurred on stamp duty amounting to Rs. 21,31,120/- and mortgage charge amounting to Rs. 8,30,920/- for obtaining loan. The Assessing Officer held it as capital expenditure as the loan was for acquiring capital as .....

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..... expenditures have been incurred for 'acquisition of new assets namely "Two Dry Docking of Trailer Suction Hooper Dredgers". Further, from perusal of above referred mortgage deed if is observed that therein it has been mentioned that "Whereas the Borrowers have applied to the Mortgagees for the grant of Term Loan/Credit facilities to the extent of Rs. 56.50 crores (Rupees Fifty six Crores Fifty lacs Only) for the purposes of acquisition and maintenance of dredgers." From the above, it is evident that the expenses under consideration were incurred for acquisition of assets and it is not the case of the appellant that the said Dredgers were stock in trade in its hand and hence the same is ought to be treated as capital in nature. The relia .....

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..... securing the use of money for a certain period and that it was irrelevant to consider the object with which the loan was obtained. Consequently, in the circumstances of the case, the expenditure was not in the nature of capital expenditure and was laid out or expended wholly and exclusively for the purpose of the assessee's business." 7. Since the facts of the present case are identical to that of India Cements Ltd. (supra), we are of the view that the action of the authorities below in holding the expenditure as capital in nature is not sustainable. Hence, we set aside the order of the authorities below and decide the issue in favour of the assessee. 8. In the result, the appeal is allowed. Order pronounced under Rule 34(4) of the ITAT .....

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