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TMI Blog1985 (7) TMI 176X X X X Extracts X X X X X X X X Extracts X X X X ..... n and investment allowance in repeat of the same. 2. On appeal, the CIT (A) has pointed out that in the ITO s order, neither the details regarding the claim of the assessee nor the reasons for the disallowance of the same hadsbeen given. However, the assessee s representative furnished a copy of the letter dt. 30th Dec. 1983 filed before the ITO. In the said letter, the assessee has stated that the assessee is manufacturing components for the various industries. Their production was being hampered to a very great extent by the powercuts, frequent power break-bowns, load-shedding etc. To maintain their full capacity production and to supply the various products to the various industries on time and according to the terms and undertakings g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enditre without conforming any overlasting benefit. It was further submitted that there is no capital element included in the expenditure inasmuch as the purpose of the expenditure is to smoothen he working of the production and the increase of profitability. Another submission made by the ld. counsel was that the expenditure was incurred on the security measure, namely, to enable the regular flow of electricity and to run the production effectively there being no increase in production. On the other hand the ld. Departmental Representative supported the order passed by the CIT (A). 4. We have heard the parties. The only question involved in this appeal is whether the expenditure of Rs. 1,16,865 incurred towards the purchase of Diesel Gen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure of the advantage in a commercial sense and that it is only where the advantage is in the capital field that the expenditure was disallowed on the ground that it was capital. If the advantage consisted merely in facilitating the assessee s treating operations or enabling the management and conduct of the assessee s business to be carried on more efficiently or more profitably while leaving the fixed capital untouched, the expenditure would be on revenue account, even thought the advantage may endure for an indefinite future. 6. According to the assessee, the generator was purchased since the production was being hampered to a very great extent by the power cut, frequent power break-downs, load shedding etc. so as to enable the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on facts that Dust Extracting unit are only accessories and part of the carding machines, it was held that the expenditure incurred for purchasing the Dust Extraction Unit is revenue in nature. In any case, Diesel Generator is not a part of the machineries used by the assesses in its business. Therefore, that decision of the Tribunal will not render any help to the assessee. Hence, the expenditure incurred in the present case should be treated as properly attributable to capital when it is made not only once and for all, but with view to bring into existence an asset or an advantage for the enduring benefit of a trade. Accordingly, we hold that the expenditure incurred for purchasing the Generator is capital in nature. Thus, the order passe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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