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TMI Blog2015 (10) TMI 1707X X X X Extracts X X X X X X X X Extracts X X X X ..... he same assessment year 2007-08. 2. The Revenue in its appeal has raised the following effective grounds of appeal:- (1) That the Ld. CIT(A) erred in deleting the disallowance of job charges of Rs. 14,12,322/- u/s 40(a)(ia) in contravention of the provisions of section 194C. (2) The ld. CIT(A) erred in deleting the disallowance of Rs. 1,20,000/- holding that the payment was in nature of salary and not professional fee liable to deduction of TDS u/s 194J. 3. The assessee in its appeal has raised the following effective grounds of appeal:- (1) That on the facts and in the circumstances of the case, the Ld. CIT(A) grossly erred and not justified in law in confirming the addition of Rs. 17,09,696/- u/s. 40(a)(ia) of the Income Tax Act, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to Rs. 17,09,696/-, since no explanation was furnished, the Assessing Officer disallowed the same also. The Assessing Officer further disallowed Rs. 1,37,941/- claimed as revenue expenditure in respect of expenses incurred under the head 'interior & design' treating the same as capital in nature. The Assessing Officer further disallowed Rs. 1,20,000/- for payment of design and drawing made to Apka Design & Drawing because the assessee failed to offer any explanation. This amount was also disallowed under section 40(a)(ia) of the Act. 6. Ld. CIT(Appeals) while partly allowing the assessee's appeal confirmed the addition of Rs. 17,09,696/- made under section 40(a)(ia) and treated the sum of Rs. 13,79,414/- as capital expenditure. Being ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s) observed that the expenditure was incurred on improving, i.e. increasing the height of factory shed and, therefore, this could not be called to be in nature of repairs. He relied on the decision in the case of Humayun Properties Ltd. -vs.- CIT reported in 44 ITR 73 (Cal.), Ratlam Bone Mills -vs.- CIT reported in 147 ITR 148 (MP), Prestige Foods Limited -vs.- DCIT reported in 61 ITD 390 (Indore), wherein it has been held that when as a result of expenditure, capacity of a structure is increased or improved, the expenditure is capital in nature. 10. Having heard the ld. D.R., we find that the assessee before the ld. CIT(Appeals) had claimed a sum Rs. 13,79,414/- as capital expenditure. Out of the total expenditure incurred an amount of Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... description as fabrication work at the assessee's premises for which material cost and labour charges were shown separately. However, the facts remained that the payments were not for any contractual job work but for supply of goods fabricated as per the assessee's requirement. 12. Ld. CIT(Appeals) after examining the bills for the work under consideration observed that the bills were mostly related to fabrication work of electrical panel boards carried out at the asseessee's premises. He pointed out that the material had been purchased by the suppliers themselves and not provided by the assesese. Therefore, the nature of transaction was supply of goods fabricated as per the assessee's requirement. He further observed that the bills raised ..... X X X X Extracts X X X X X X X X Extracts X X X X
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