9911796707
TMI Blog2023 (3) TMI 1056X X X X Extracts X X X X X X X X Extracts X X X X ..... in ITA No.368 & 369/Kol/2010 years 2005- 06 and 2006-07. The revenue has raised the following substantial questions of law for consideration: (i) Whether the learned Tribunal below committed substantial error of law in allowing excess claim of expenses amounting to Rs.1,35,48,466/- for the assessment year 2005- 06 and Rs.1,18,50,085/- for the assessment year 2006-07 relating to purchase of steel rolls by treating the same as revenue expenditure ? (ii) Whether the learned Tribunal below committed substantial error of law in deleting the addition of Rs.5,24,80,600/- for the assessment year 2005-06 and Rs.18,32,288/- for assessment year 2006-07 as 'deemed dividend' by misinterpreting the provisions contained in Section 2(18)(b)(B)(c) an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placement of rolls and the expenditure incurred thereon would certainly fall in the nature of current repairs as the same does not result in creating of capital assets or benefit of enduring nature. The Tribunal also noted the Harmonised Commodity Description & Coding System which classifies that parts covered under the heading rolls and other parts are rolls of rolling mills. Therefore, rolls are parts of rolling mill. The issue was whether the mere fact that the appendix prescribed the rate of depreciation of rolls prior to 30th September, 1991 as 100% and thereafter at 50%, so it to be assumed that the expenditure should be treated as capital expenditure. This aspect was also considered in the case of Malhotra Industrial Corporation tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terial is fed on one end and the finished product comes out at the other end without intervention in between. For example, in the case of continuous casting machine in the steel industry we have one continuous integrated process under which scrap (raw material) is put in and what comes out is steel or iron or aluminium. Another example, in the case of a "pasteurization plant" we have three chambers and ducts. In the first mils is collected, in the second it is heated and in the third it is cooled. Duct carries hot and cold water. The raw material is raw mils, the end product is the pasteurized milk. In the heat chamber there is the heater. In the cooling chamber we have a cooling plant which has a concept similar to air-condition plant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the object of the expenditure must not be to bring a new asset into existence or to obtain a new advantage." If the law laid down in the above decision is applied to the case, it has to be necessarily held that the expenses incurred for replacement of the steel rolling machine are revenue expenditure and thus the Tribunal was fully justified in dismissing the revenue's appeal. Thus, we find no ground to interfere with the order of the Tribunal. With regard to the first issue, the Tribunal has considered the entire factual aspect which was in depth dealt with by the CIT(A() and the revenue could not controvert the factual position as was brought on record by the CIT(A). Furthermore, it is seen that the finding of the CIT(A) remained unco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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