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TMI Blog1978 (3) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... , the contention of the learned counsel for the assessee was that the cost of the starter of electric motor was Rs. 2,254. The starter has to be replaced as the old starter became useless by a constant use. According to the assessee, such expenditures are revenue expenditure and as such they are allowable. Reliance was placed on the ratio of decision in the cases of CIT vs. Mahalaxmi Textiles Ltd.(2) and CIT vs. Kanodia Cold Storage.(1) 4. The learned Departmental Representative submitted that there is no evidence on record to show that there was replacement of new Starter in place of old ones. Thus it was pointed out that the expenses in question were of capital nature. 5. In my opinion, the contention of the assessee must be accepted. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontended that the learned AAC was wrong in sustaining the disallowance, The assessee has given the details of the entire expenditure. The sum of Rs. 1,350 were spent on the repairs of Kapas Dara. For this purpose, the assessee also purchased Bricks for Rs. 2,380. The other expenses were incurred on labour. Bricks were required for repairs of Daras on which the Kapas and Narma are heaped. Thus it was contended that the entire expenditure are of revenue nature. 9. The learned Departmental Representative submitted that the assessee never took the stand before the ITO and the AAC that ever existed any Dara on which Kapas and Narma were heaped. The case of the assessee before the authorities has been that these expenses were incurred on the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case can go to show that Kapas Dara was built for the first time. Expenses incurred on such asset could only be called expenses of capital nature. So the learned A.A.C. was right in holding that the said expenditures were of capital nature. 11. During the course of assessment proceedings the ITO found that Shri Gaurishankar is said to have done some business of purchase and sale of 170 bags of jow in the arhat of appellant firm. The purchase was made for Rs. 18,023.40 @ Rs. 120 per qtl. The sale was effected for Rs. 22,102.97. Thus there was profit of Rs. 4,080 on that transaction. 12. According to the assessee, the said transaction was entered into by the assessee on behalf of Shri Gaurishankar. In support of this contention, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee must be accepted. From the affidavit and the statement of Gaurishanker it is clear that the transaction in question was entered on his behalf and appropriate entries were made in the books of the assessee maintained in the ordinary course of business. The profit earned on the said transaction were enjoyed by Gaurishanker. He disclosed these profits in his return and the assessment was made accordingly. There is no evidence on record to show that in substance the profits were earned by the assessee firm. 17. Looking to the aforesaid facts, evidence on record and the preponderance of probabilities it is established that the profits in question were earned by Gauri Shanker and, as such, the same could not be added to the total income of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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