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Issues involved: The judgment involves two main issues - one regarding the deletion of disallowance of garden expenses and the other concerning the deletion of filtration expenses.
Garden expenses: The assessee incurred expenses for maintaining the garden at the factory premises, ranging from &8377; 500 to &8377; 5,000 each. The AO treated this expenditure as capital in nature, but the ld. CIT(A) deleted the addition based on previous decisions. The AR argued that the expenditure was revenue expenditure for maintaining the factory premises, citing relevant court decisions. The Tribunal agreed, stating that maintaining the garden is essential for creating a healthy environment for workers, and such expenditure is incurred wholly and exclusively for business purposes. Therefore, the ground of Revenue was rejected. Filtration expenses: The AO disallowed a claim of &8377; 5,57,335 made by the assessee for filtration expenses, considering it as capital expenditure. The ld. CIT(A) allowed the claim, stating that the consumables used for filtration were day-to-day items necessary for maintaining the plant's standard for production. The Tribunal upheld the ld. CIT(A)'s decision, noting that the expenses did not create any capital asset or enduring benefit. The expenditure was categorized as current repairs, and the appeal filed by the Revenue was dismissed. Final Decision: The Tribunal dismissed the appeal filed by the Revenue, upholding the decisions of the ld. CIT(A) regarding both the garden and filtration expenses.
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