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TMI Blog2014 (9) TMI 1230X X X X Extracts X X X X X X X X Extracts X X X X ..... venue's appeal is decided in favour of the assessee by the Tribunal in assessee's own case in A.Yrs 2004-05 and 2005-06 in ITA Nos. 5779 & 5780/M/08. 4. The Ld. Departmental Representative fairly conceded to this. 5. We find that this issue has been decided by the Ld. CIT(A) at para8.3 of his order where he has followed the earlier decisions of his predecessor on identical facts. The Ld. CIT(A) observed that in earlier years the Tribunal has confirmed the findings of the Ld. CIT(A). The Ld. CIT(A) accordingly followed the findings of the Tribunal. 6. We have carefully perused the orders of the AO. We have also gone through the decision of the Tribunal in assessee's own case (supra). We find that the Tribunal has considered this issue at para-7 on page-4 of its order and dismissed this ground of the Revenue. As no new facts have been brought on record before us, respectfully following the findings of the co ordinate bench, this grievance of the Revenue is dismissed. 7. In so far as the additional ground of the Revenue is concerned, the assessee has filed an affidavit of the Managing Director stating that at the time of filing of the appeal before the Ld. CIT(A), the Managin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owed depreciation as per the provisions of law and disallowed the balance amount. 12.2. The assessee carried the matter before the Ld. CIT(A). It was strongly contended that the expenditure was incurred for the upgradation of the software already installed and therefore the expenses incurred by the assessee has to be treated as revenue expenditure. After considering the submission of the assessee, the Ld. CIT(A) directed the AO to delete the disallowance of Rs. 1,03,500/- and confirmed the balance disallowance. 12.3. Aggrieved by this, the assessee is before us. It is the say of the Ld. Counsel that the upgradation were carried out on items capitalized in the earlier year and the expenses incurred are not for any new item therefore the expenditure are of revenue in nature. 12.4. Per contra, the Ld. Departmental Representative strongly supported the findings of the lower authorities. 12.4. We have carefully perused the orders of the authorities below. Hon'ble Madras High Court in the case of CIT Vs Sundaram Clayton Ltd. 321 ITR 69, following the decision in the case of Southern Roadways 288 ITR 15 has held that "upgradation of computers thereby enhancing the configuration o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowance. 13.3. Aggrieved by this, the assessee is before us. The Ld. Counsel for the assessee strongly submitted that the revenue authorities have taken the figure of borrowings which was at the end of the financial year. It is the say of the Ld. Counsel that the entire capital work-in-progress during the year was met out of the internal accruals of the assessee and therefore no borrowed capital was utilized. 13.4. Per contra, the Ld. Departmental Representative strongly supported the findings of the AO. 13.5. We have carefully perused the orders of the authorities below and the relevant material evidence brought on record before us. The AO has gone by the presumption that the assessee must have utilized some part of the borrowed capital towards capital work-in-progress. A perusal of the balance sheet of the assessee shows that the assessee has generated cash to the tune of Rs. 34.50 crores as is evident from the cash flow statement appearing on 43 of the Annual statement of account. The total expenditure incurred towards capital work-in-progress is only Rs. 6.45 crores. This clearly show that the assessee was having sufficient own funds. We, therefore, do not find any merit in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c. 14.6. The object and purpose of every repair is to improve the bad condition of the building to prevent its further deterioration as far as possible and to keep it wind and water-tight. So long the repair does not bring into existence, an additional advantage or benefit of an enduring nature or change the nature, character or the identity of the building itself, the expenditure has to be considered as revenue expenditure. For these observations, we draw support from the decision of the Hon'ble Calcutta High Court in the case of ICI (India) Pvt. Ltd. 113 ITR 105. A perusal of the detail shows that no structural alteration was made to the building and the assessee carried out only repairs which were absolutely necessary to preserve and maintain the building and to prevent its further deterioration. The plastering process may have extended the life of the building, it has not extended the original life of the building nor the original condition of the building. The quantum of expenditure by itself cannot be a determining factor for finding out an expenditure as revenue or capital. Considering the facts in totality, in our considered opinion, the expenditure incurred by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be noted that the number of units of electricity purchased is 3250 thousand as against 12593 thousands units from own generation. In view of the above, we submit that the Power & Fuel as debited to Profit & Loss account of the EOU is correct and request you to kindly accept the same. 15.2. This explanation of the assessee did not find any favour from the AO who proceeded by reallocating the expenditure and estimated the disallowance at Rs. 61,53,396/-. 15.3. The Ld. CIT(A) has considered the grievance of the assessee at para 7.1 of his order. At para 7.3, the Ld. CIT(A) confirmed the findings of the AO. 15.4. Aggrieved by this, the assessee is before us. The Ld. Counsel for the assessee reiterated what has been submitted before the lower authorities. It is the say of the Ld. Counsel that the assessee is maintaining separate books of account for all units, EOU and non-EOU. The AO has not pointed out any defect or discrepancy in any of the books of account therefore the estimation made by the AO is uncalled for and deserve to be deleted. 15.5. The Ld. DR supported the orders of the revenue authorities. 15.6. We have carefully perused the orders of the authorities below and the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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