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TMI Blog2014 (8) TMI 1223X X X X Extracts X X X X X X X X Extracts X X X X ..... rred in law and on facts in confirming Assistant Commissioner of Income Tax-Circle 1 contention that expenditure amounting to Rs. 1,09,22,060/- incurred for constructing the "Express Feeder" on behalf of Maharashtra State Electricity Board ('BSEB') is not deductible as a revenue expenditure. 2. The appellant craves leave to addition / modify / alter / deleted all / any of the grounds of appeal. 2.1 The assessee is a company engaged in the business of designing, developing and manufacturing injection moulding devices and other polymer based products required for two wheeler and four wheeler automobile industries., The assessee has filed return of income on 30.09.2008 declaring total income of Rs. 23,09,39,060/-. The Assessing Officer has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in surrounding areas has jointly incurred expenses for installation and construction of the express feeder in the assessment year under consideration. The amount of Rs. 109.22 lacs was paid for purchase of material used for constructing and installing electrical express feeder on behalf of MSEDCL. Assessee share of expenses amounts to Rs. 1,09,22,758/-. As per express understanding between MSEDCL and contracting parties the express feeder was required to be constructed / installed as per the strict specification provided by MSEB. The benefits of the feeder station would be for indefinite period however, for undertaking such expenditure; parties were granted exclusive rights to use the feeder station for successive 5 years. As per the agree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e parties M/s. Endurance Technologies Pvt. Ltd. who is co-beneficiary of above feeder along with the assessee has not claimed the expenditure as revenue expenditure. However, third beneficiary has claimed the same as revenue expenditure which was not disturbed by the Revenue authorities. These undisputed facts emerged from that the assessee along with two parties have entered into a contract with MSEDCL for erection of express feeder line for regular and uninterrupted supply of power for manufacturing activity. We find that the Hon'ble Delhi High Court in the case of CIT vs. Dart Manufacturing India (P) Ltd. (2008) 175 Taxman 6 (Del) has held that the payment to State electricity board for installing a transformer and LT Lines for supply of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ference was rejected by the Hon'ble High Court. 7. We also find that the Hon'ble High Court of Madras in the case of CIT vs. T.V. Sundaram Iyengar & Sons (P) Ltd. (1974) 95 ITR 428 (Mad) has held that amount spent on land purchased in the name of District Collector for constructing houses for assessee company's workers under a Govt. sponsored scheme was a revenue expenditure incurred wholly and exclusively for business. Similarly, we find that the Hon'ble High Court of Calcutta in the case of CIT vs. Birla Jute Manufacturing Co. Ltd. (1990) 182 ITR 497 (Cal) has held that the payment to Electricity Board for laying service lines - Ownership of service lines vesting with Board was held as revenue expenditure. 8. In view of the above factua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same has been opposed on behalf of Revenue, inter alia, stated that the CIT(A) was not justified in deleting the addition of Rs. 18,05,981/- made on account of disallowance of additional deprecation on Racks, Trolly, Air Conditioner, Water Cooler/ Refrigerator, Camera, Computer attendance and Card/System, Wall Mounted Fan, D G Set and Electrical Fitting, specifically when these items does not come under plant and machinery. On the other hand, the learned Authorized Representative has supported the order of CIT(A) on the issue. 12. After going through the rival submissions and material on record, we find that for furniture and fittings including electric fittings, the same rate of depreciation has been prescribed. The machinery is entitled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of production or processing of the chemical tests in the laboratory premises leading to the production of the stocks, they must be categorized as plant and machinery. 13. We find that the Hon'ble Bombay High Court in the case of CIT vs. Parke Davis (India) Ltd. (1995) 214 ITR 587 (Bom) has held that the assessee company claimed depreciation u/s.32 in respect of the fans, which were installed in its administrative office. The Tribunal held that the fans installed in the administrative office of the assessee constituted plant and machinery for the purpose of granting depreciation u/s.32 of the Act. On reference, the Hon'ble High Court held that the expression plant has been given an extended meaning even to include vehicles, books, scientifi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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