TMI Blog2009 (1) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... unity of control and interlacing of the units, the expenses incurred by the assessee for the setting up of a new unit, would be of a revenue nature – The tribunal, in our view, has correctly concluded that the authorities below had erred in holding the said expenditure to be of a capital nature. We agree with the conclusion of the tribunal that the whole of the expenditure is to be allowed as revenue expenditure and consequently there would be no question of grant of depreciation on such expenditure. - 1293/2008 - - - Dated:- 23-1-2009 - ITA 1293/2008 COMMISSIONER OF INCOME TAX DELHI VI, NEW DELHI versus TRIVENI ENGINEERING and INDUSTRIES LIMITED WITH ITA 1298/2008 COMMISSIONER OF I NCOM E TAX DELHI VI, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duction of administrative expenses incurred in the course of the renovation of the two units. 3. The Assessing Officer as well as the Commissioner of Income-tax (Appeals), in each of the three years in question, disallowed the expenditure under the head "administrative expenses" incurred in connection with modernization and expansion of the Deoband and Ramkola units, by holding that the expenditure had been incurred for acquiring a benefit of an enduring nature and consequently it was capital in nature. The Assessing Officer had also noted that the expenditure had been capitalized in the books of accounts maintained by the assessee and, therefore, the assessee was asked to explain as to why the said expenditure should not be treated as c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was incurred and administrative expenses had been allocated on an estimate basis towards the renovation and modernization of the said units. The tribunal held that though the expenses had been capitalized in the books of accounts of the assessee, this would not be conclusive of the nature as to whether the expenditure was of a capital nature or a revenue nature. The tribunal followed the decision of the Supreme Court in the case of The Kedarnath Jute Manufacturing Co. Limited v. The Commissioner of Income Tax (Central), Calcutta, 82 ITR 363 to hold that entries in the books of accounts of the assessee were not conclusive of the nature of expenses. The tribunal thereafter examined the issue as to whether in a continuing business, when expen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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