TMI Blog2011 (3) TMI 1810X X X X Extracts X X X X X X X X Extracts X X X X ..... e the appeals filed by the assessee and the revenue for the asst. year 2005-06 against the order of the CIT(A)-I, Bangalore dated 01.12.2009. 2. Brief facts of the case are that the assessee company is engaged in the business of manufacturing batteries. It filed its return of income for the asst. year 2005-06 declaring a loss of ₹ 6,41,595/-. During the assessment proceedings u/s 143(3) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to explain as to why the same should not be treated as capital expenditure. 3. The learned counsel for the assessee submitted before the AO that the land was converted into stock-in-trade prior to sale of the land and therefore this expenditure should be allowed as revenue expenditure. However, the AO held it to be capital expenditure and disallowed the same. Further, he also observed that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penses, the assessee has all along treated the land as its capital asset and according to the assessee, it is only on 1/4/2004 that the said capital asset has been converted into stock-in-trade. However, we also found that the assessee has itself offered the income from the sale of the land as income from long term capital gain. The assessee cannot take two different and contradictory stands in tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vision for warranty is concerned, we find that as on 1/4/2004 the available provision was ₹ 19,24,354/- and the warranty expenses incurred in 2004-05 were ₹ 1,15,50,719/- and the warranty for the year is ₹ 96,26,365/- and the difference between these two is ₹ 19,24,354/-. The assessee has made a provision of ₹ 27,20,647/- during the relevant asst. year for the claims ..... X X X X Extracts X X X X X X X X Extracts X X X X
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