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TMI Blog2016 (12) TMI 790X X X X Extracts X X X X X X X X Extracts X X X X ..... red to be noted that the consumption of gas was the basic need for ONGC failing which the corporation could not have functioned. In that view of the matter, we are of the opinion that the Tribunal is justified in allowing deduction of payment to ONGC. In the assessee’s own case, the Assessing Officer for the assessment year 2004-05 has in the assessmnet order stated that amount is allowed on payment basis and accordingly in the year under consideration where the liability is crystallized by the order of Supreme Court, the deduction claimed on protective basis shall not be granted. Considering the decisions cited hereinabove, we are of the view that issue raised in both these appeals is required to be answered in favour of the assessee and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owance of stores and spares treating the same to be of capital expenditure - Held that:- Tribunal held that the description of items consisting of centrifugal pumps, humidity indicators, temperature controller, vaccum pump, 3-phase industrial motors, submersible pump etc and that the same falls in the category of consumable stores and spares. We are of the view that the same should be considered under the head of revenue expenditure and the Tribunal is justified in considering the same as revenue expenditure and accordingly the said question is answered in favour of assessee and against the revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... , without giving any finding as to the cut off date of allowability ? [C] Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in allowing depreciation on all the items of air pollution control equipments and energy saving devices, despite the qualifying effect of the word ? being? used at item number III(2)(iv) and III(3)(iii) of the Appendix-I to the Income Tax Rules, restricting 100 % depreciation to items specified under the general category of air pollution control equipments and energy saving devices? [D] Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the expenditure on centrifugal pumps, humidity indicators, temperature controllers, va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law in setting aside the disallowance of exchange fluctuation loss with the observations, inter alia, that, if it was held to be capital loss, it should be set off against the profit from the sale of unistalled equipments purportedly taxed in the assessement year 1997- 98, which was not permissible under law ?? TAX APPEAL NO. 786 of 2007 Whether on the facts and circumstances of the case, the Appellate Tribunal was right in law in allowing deduction of payment of the ONGC, when the whole contractual liability was in dispute before the Hon'ble Supreme Court? TAX APPEAL NO. 1433 of 2008 Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that as the issue related to Gas Liabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounts that have been given and the payments made towards liability existing at that point of time. 2.2 We are of the view that taking into consideration the issue which was pending before the Apex Court regarding the liability to be fixed but ONGC has already consumed the gas. In that view of the matter, ONGC is required to make payment as it is a statutory body. Apart from that, it is required to be noted that the consumption of gas was the basic need for ONGC failing which the corporation could not have functioned. In that view of the matter, we are of the opinion that the Tribunal is justified in allowing deduction of payment to ONGC. In the assessee's own case, the Assessing Officer for the assessment year 2004-05 has in the assessmne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and against the revenue. 3.1 So far as question regarding non allowance of depreciation @100% in respect of air pollution control equipments is concerned, the Tribunal has allowed the claim by citing the reason that the work "being" used as item no. III(2)(iv) and III(3)(iii) as illustrative in nature and not exhaustive and the context in which words are used and that all the assets functioned with main plant and integral part of plant. The said issue has now been decided in favour of the assessee by this Court in Tax Appeal No. 1147 of 2005. We therefore answer the said question in favour of assessee and against the revenue. 3.2 With regard to the question relating to disallowance of stores and spares treating the same to be of capital e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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