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Issues: Investment allowance on Table Ghar account & Revenue expenditure on Copper Rolls
Investment Allowance on Table Ghar Account: The issue revolved around whether the expenditure incurred on Table Ghar account, which was used for the printing unit, qualified for investment allowance under section 32A. The Assessing Officer disallowed the investment allowance on the Table Ghar account, stating it was not part of the plant and machinery. However, the CIT (A) disagreed and allowed the investment allowance, considering the Table Ghar essential for the printing work plant. The debate centered on whether the Table Ghar should be considered part of the plant and machinery for investment allowance purposes. The Departmental Representative argued that the Table Ghar, being a superstructure, should not be classified as part of the plant and machinery, citing a relevant High Court judgment. On the contrary, the appellant contended that the specially designed superstructure was crucial for the printing activity, referring to various legal precedents supporting their stance. The Tribunal ultimately ruled against the appellant, emphasizing that the Table Ghar did not qualify as plant and machinery and, therefore, was not entitled to investment allowance under section 32A. Revenue Expenditure on Copper Rolls: The second issue pertained to the claim of Rs. 24,508 on Copper Rolls as revenue expenditure. The Assessing Officer treated the expenditure as capital in nature, allowing only depreciation and disallowing a significant amount. However, the CIT (A) accepted the claim as revenue expenditure, considering the copper rolls as consumable items essential for the printing work. The Departmental Representative argued that a similar case decided by the Jaipur Bench classified copper rolls as capital items entitled to depreciation only. Conversely, the appellant contended that copper rolls were consumable tools used for printing and design work, justifying their treatment as revenue expenditure. The Tribunal sided with the appellant, agreeing that the consumption of tools during manufacturing activities constituted a valid revenue expenditure. Therefore, the claim of Rs. 24,508 on Copper Rolls was deemed allowable and rightly approved by the CIT (A). In conclusion, the Tribunal's judgment clarified the eligibility criteria for investment allowance under section 32A concerning specialized structures like Table Ghar and affirmed the treatment of consumable tools like Copper Rolls as revenue expenditure. The decision underscored the importance of distinguishing between capital and revenue expenditures based on their essentiality and functionality in the business operations.
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