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TMI Blog2018 (4) TMI 267X X X X Extracts X X X X X X X X Extracts X X X X ..... nate the property during the lease period. The machinery and other equipments installed during the modernization or expansion of the sugar factory has to be handed over to the lessee in the working conditions. The Tribunal while arriving at a decision has failed to appreciate the terms and conditions of the lease deed. On the other hand, proceeded to consider the same as a sale deed which prima facie appears to be a wrong approach. This Court finds it appropriate to set aside the impugned order and remand the matter to the Tribunal for fresh consideration. Hence, without expressing any opinion on the substantial questions of law raised by the assessee, impugned order is set aside. The matter is remanded to the Tribunal for fresh cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... short the Act ). After examination of the de tails, the Revisional Authority opined that lease rentals paid for the initial two years as capital expenditure, the impugned assessment year being the second year of the operation of the lease, the respondent disallowed the lease rent of ₹ 24,80,00,000/-. Against the order of the Revisional Authority, appeal was preferred before the Tribunal by the assessee challenging the order passed under Section 263 of the Act. The order of the Revisional Authority was set aside by the Tribunal and was remanded to the Assessing Officer. In the assessment proceedings, pursuant to the order under Section 263 of the Act, the Assessing Officer disallowed the sum of ₹ 24,80,00,000/-. Being aggrieved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the date of the agreement. All the equipments, industrial machinery and other assets created/acquired or added under LROT Scheme shall be handed over to the lessee in the working condition which demonstrates that the expenditure incurred on the lease rental is revenue in nature. However, these aspects were not considered by the Tribunal while arriving at a decision as to whether these expenditures are revenue or capital in nature. The Tribunal misconceived the submissions made by the learned counsel for the assessee while recording that life of a sugar mill is only to the extent of the lease i.e., 30 years meaning thereby that at the end of the lease hold, the useful life of the sugar factory would be over and it may not be usable for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other hand, proceeded to consider the same as a sale deed which prima facie appears to be a wrong approach. In addition to this, learned counsel has also relied upon the judgment of this Court in the case of Sri Ramu Solanke and others Vs. State of Karnataka reported in ILR 2008 KAR 606 where the lessee was required to invest in the factory and increase the crushing capacity as well as establish co-generation as well as the distillery and ethanol unit. After the lease period is over, the entire assets including those that have been set up at the cost of the lessee would revert back to the society. 7. Considering these aspects, this Court finds it appropriate to set aside the impugned order and remand the matter to the Tribunal for fr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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