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TMI Blog2012 (10) TMI 773X X X X Extracts X X X X X X X X Extracts X X X X ..... ur of assessee. Bank Guarantee & Loan Processing Charges - Held that:- Considering assessee's submission it can be concluded that loan was taken for working capital on perusal of the copies of invoices issued by various vendors as it reveals that the goods purchased by the assessee are insulator, panels etc. FAA fail to look into the fact that assessee is in the business of manufacture distributor transformers, HT cable box on job contract basis. It also constructs power houses and lays electrical lines. In connection with these operation, assessee has to purchase all these items. These items were consumed in the ultimate final product, which is the trading stock of the assessee - in favour of assessee. - I.T.A .No-4214/Del./2012 - - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted the bank guarantee fees as well as loan processing charges as capital expenditure. His brief finding on both the issues reads as under:- 1. Tender Fees Expenses During the year, the assessee has claimed and amount of Rs.1,57,200/- towards tender fees expenses. The assessee stated that said expenses were incurred for the tenders called by different State Electricity Board and Govt. undertakings. The expenditure incurred towards tender fees for securing contracts is in the nature of capital expenditure. The Hon'ble Supreme Court in the cases of IR vs. Adion 1928 Hon'ble Supreme Court 738, RB Seth Moolchand Suganchand vs. CIT 86 ITR 647 held that expenses in connection with procuring a license is in the nature of capital expendi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asset on lease for a period of 20 years. In the present case, the assessee has been submitting tender in its day-today business which are basically works contract on turn key basis. The assessee has procured orders for sale of its items manufactured. It has to fulfill the tenders floated by State Governments or Electricity Boards. It is not necessary that it will get the order. The tender fees was paid by it in the day-to-day ordinary business. It does not create any new asset. It was incurred in connection with the integral part of profit earning process and not for acquisition of any asset. Ld. Revenue authority has filed to look into the true nature of the expenses. 6. As far as the loan processing charges are concerned, we find t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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