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TMI Blog2014 (1) TMI 1848X X X X Extracts X X X X X X X X Extracts X X X X ..... in not applying ratio of Hon'ble Apex Court's decision in the case of Madras Industrial Investment Corporation Ltd. vs. CIT 225 ITR 802 (SC), and by directing to allow such expenses in question in full in one year, even while stating that legal aspect of the ground goes in favour of A.O? (ii) Whether on facts and in circumstances of the case, Tribunal was right in law in holding that the expenditure incurred of Rs. 4,16,93,695/- on replacement of core engine of Captive Power Plant is revenue in nature and not capital, even when pronouncing a finding that the benefit derived was an enduring one? (iii) Whether on facts and in circumstances of the case, Tribunal was right in law in reversing decision of the CIT(A), in allowing the lease ren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue expenditure in one year. In our humble understanding of law, the amortization of certain expenses are allowable only under section 35D, 35DD and 35DDA of IT Act. Otherwise an expenditure is allowable in the year expended wholly and exclusively for the purpose of business. With this legal background, we have noted that for AY 2002-03 the tribunal has also commented that the assessee-company had not deferred the payment rather the entire payment was made in that year. Due to this reason, we hereby hold that by reducing the liability of interest as claimed by the assessee on account of "restructuring of debt"the assessee has gained the commercial benefit, therefore the incurring of the expenditure in question can be said to be expended whol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x years, no error is committed by both the authorities. Once the expenditure is held to be revenue in nature incurred wholly and exclusively for the purpose of business, it can be allowed in its entirety in the year in which it is incurred. However, considering the the decision in the case of Madras Industrial Investment Corporation Ltd. (supra), when the spreading is done for over a period of six years and as the assessee-respondent has no objection to such revenue expenditure being spread out, though it could have insisted for this amount allowed in the year under consideration, with no such objection having been raised, the Revenue would not succeed in this issue as the expenditure is held to be revenue in nature. Thus, the second questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sets taken on lease. According to the Assessing Officer this was a financial transaction. CIT(Appeals) also had concurred with findings of the Assessing Officer. The Tribunal noted that GNFC Limited had shown lease rent as income under the head "Business income" and in case of the lessor, the issue had been consistently decided that the assets were owned by the GNFC, and therefore, the lease rent received by the assessee was to be assessed as business income. We notice that in case of Deputy Commissioner of Income Tax, Bharuch Circle vs. Gujarat Narmada Valley Fertilizers Co.Ltd decided in Tax Appeal No.516 of 2012, this aspect has been already considered by this Court as under:- "7. With respect to questions-VI and VII, we notice that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is reserved. Thus, Ground No.12 of the assessees appeal is allowed. 7.1 From the above, we noticed that one of the prime factors which weighed with the Tribunal was the rule of consistency. Learned counsel for the assessee rightly pointed out that such claim did not arise for consideration for the first time, but, is spread over to the entire period between A.Y. 1996-97 to 1999-2000. Such claim was made by the assessee and duly granted by the Assessing Officer. In that view of the matter, in our opinion, the Tribunal committed no error." 9. Tribunal, therefore, has committed no error in allowing the appeal of the assessee respondent dismissing the claim of the Revenue. Resultantly, present Tax Appeal requires to be dismissed and is dism ..... X X X X Extracts X X X X X X X X Extracts X X X X
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