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TMI Blog1995 (7) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... heir own recreation. The assessee, therefore, as a gesture got a T.V. installed there at a cost of Rs. 35,207. The Assessing Officer (AO) treated it as a capital expenditure and disallowed the same. However, he allowed depreciation of Rs. 7,041 on it thereby making a net addition of Rs. 28,166. The learned CIT(A) did not think it fit to interfere with the action of the AO. 4. The learned counsel contended that in present times these are usual welfare expenses which a prudent businessman has to incur in the ordinary course of business and considering the facts of this case in particular, it has to be looked at favourably. Moreover, he submitted that the T.V. has been given away to the club and the ownership does not remain with the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to excavate the minerals and it did not result into any acquisition of a capital asset. Further, it was contended that the expenses incurred were not for getting a new lease but were for renewal of the lease which was already there. He also relied on several authorities in support of his contentions. 10. We have considered the rival submissions and referred to the authorities cited by both the parties. 11. The facts in the case of CIT vs. New India Mining Corporation (P) Ltd. (1987) 63 CTR (Bom) 93 : (1987) 168 ITR 431 (Bom) cited by the learned Departmental Representative were quite different from the present case. In that case, the Hon'ble Bombay High Court was concerned with "Mining Land Restoration Charges", whereas in the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advantage secured was of an enduring nature. 13. In Plantation Corpn. of Kerala Ltd. vs. Commr. of Agrl. IT (1994) 205 ITR 364 (Ker), the assessee had incurred Rs. 39,858 towards stamp duty and registration expenses incurred for the lease deeds executed by it. The Kerala High Court held that the Tribunal had overemphasized the fact that the assessee had acquired an enduring benefit by obtaining long-term lease arrangements. The Court observed that even in a case where expenditure is incurred for obtaining an advantage of enduring benefit, emphasis should be placed on the nature of the advantage in a commercial sense and if the advantage consists merely in facilitating the assessee's trading operations, the expenditure should be held to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case drive us to conclude that the expenditure of Rs. 1,00,000 incurred by the assessee was on revenue account and the deduction thereof be allowed. 17. The third ground pertains to the disallowance of Rs. 1,12,643 charged by the Rajasthan State Electricity Board (RSEB) as electricity charges under s. 43B of the IT Act, 1961 (the Act). 18. These were additional electricity charges raised by the RSEB for the period May, 1982 to April, 1985 vide its bills dt. 7th March, 1988. The AO disallowed the same on the ground that the charges pertained to earlier years and hence could not be allowed as an expenditure in the current year. The learned CIT(A) sustained the addition, although on a different ground, treating the same as statutory payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be said to have been ascertained only on receipt of the bill and not before that. As the liability does not pertain to the assessment year under consideration, the addition is sustained. 24. In the result, the appeal is partly allowed. (II) Asst. yr. 1989-90 A. Assessee's appeal (ITA No. 987/Jp/91): 25. The first ground in this appeal pertains to the computation of profits under s. 80HHC. The contention raised by the assessee in the ground is that depreciation should not be deducted while computing the profits for the purposes of deduction under s. 80HHC. 26. In view of several decisions on this issue being in favour of the Revenue, the ground was not pressed at the time of hearing and hence the same is dismissed as such. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placement on its obsolecence and without it the machine is defunct. The decision relied upon by the learned Departmental Representative in the case of Manoj Dyeing Co. vs. CIT is of no avail to the Department as it speaks of substantial replacement of the equipment. Replacing old electric motors by new ones cannot be termed as substantial replacement of an equipment. Thus, we confirm the deletion made by the learned CIT(A). 34. The second ground pertains to the deletion of Rs. 3,250 paid to an advocate for consultation about mining lease. The AO had treated it as capital expenditure and hence disallowed the same. This expenditure had on the same footing on consultancy charges paid to Dynamic Consultants Pvt. Ltd. The expenses incurred in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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