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Issues Involved:
1. Timeliness of the appeal filed by the revenue. 2. Nature of expenditure (capital vs. revenue) related to the amount disallowed by the Assessing Officer. Issue-wise Detailed Analysis: 1. Timeliness of the Appeal Filed by the Revenue: The primary issue was whether the appeal filed by the revenue was time-barred by 612 days. The revenue argued that there was no delay in filing the appeal as they had applied for a certified copy of the order within the limitation period on 17-3-1989, but had not received it. The appeal was filed on 23-11-1990 with an attested copy of the order by the Assessing Officer. The revenue contended that the appeal should be admitted and disposed of on merits as the time for filing the appeal was still available until the certified copy was received. The assessee's counsel resisted this submission, arguing that the revenue had not shown any steps taken during the 612 days to obtain the certified copy, violating Rule 9 of the Income-tax Appellate Tribunal Rules. The counsel cited a High Court decision, emphasizing that the delay was due to gross negligence and deliberate inaction by the department, thus the appeal should be dismissed as time-barred. The tribunal examined the arguments and statutory provisions, noting that the right of appeal is a substantive right. Section 268 of the ITR allows for the exclusion of time required for obtaining a certified copy when computing the limitation period. The tribunal referred to a precedent from the Assam High Court, which supported the exclusion of time for obtaining a certified copy even if not required to be filed with the application. Rule 9 requires a memorandum of appeal to be accompanied by a certified copy of the order appealed against. However, an Explanation added w.e.f 1-8-1987 allows for an attested copy to be included. The tribunal clarified that this Explanation is an enabling provision to facilitate the filing of appeals and does not negate the right to obtain a certified copy. The tribunal concluded that the revenue had not waived its right to receive the certified copy and that the appeal was filed within the permissible time, thus admitting the appeal for hearing. 2. Nature of Expenditure (Capital vs. Revenue): The second issue addressed the nature of the expenditure amounting to Rs. 69,167, which the Assessing Officer had disallowed, treating it as capital expenditure. The revenue contended that the CIT (Appeals) erred in deleting this disallowance, arguing that the expenditure was capital in nature as it involved converting land and planting new tea plants, which would be an asset for the assessee for at least 50 years. The assessee argued that the expenditure was for replanting diseased and non-yielding plants within an already planted area, thus it should be considered revenue expenditure under Rule 8(2) of the Income-tax Rules. The CIT (Appeals) had agreed with the assessee, treating the expenditure as revenue in nature. The tribunal reviewed the facts and found that the expenditure was for gap filling, i.e., planting new tea crops in place of diseased or obsolete plants. This replacement did not constitute capital expenditure despite providing enduring benefits. The tribunal upheld the CIT (Appeals)'s decision, concluding that the expenditure was revenue in nature and did not require interference. Conclusion: The appeal by the revenue was dismissed on merits, with the tribunal affirming that the expenditure in question was revenue in nature and the appeal was filed within the permissible time frame.
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