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TMI Blog2018 (11) TMI 545X X X X Extracts X X X X X X X X Extracts X X X X ..... er the lower authorities, the borrowed fund has been utilized in the capital work-in-progress in view of the fact that the accumulated loss of the assessee exceeds the fund of the assessee. Assessee before us has not advanced any argument on this issue. Therefore, we have no alternative except to confirm the order of lower authorities. Hence, the ground of appeal of the assessee is dismissed. Nature of expenses - Purchase of stores - capital expenditure eligible for depreciation or revenue expenditure - Held that:- We conclude that the purchase of stores is representing revenue expenditure and no disallowance can be made treating them as capital expenditure. It is also pertinent to note that the AO will disallow the relief given to the assessee by way of providing depreciation on the purchase of stores and will allow the deduction on account of purchase of stores made by the assessee during the year. Hence, the ground of appeal of the assessee is allowed. - I.T.A. No. 2664/Ahd/2015 - - - Dated:- 6-9-2018 - Shri Waseem Ahmed, Accountant Member And Ms. Madhumita Roy, Judicial Member For the Appellant : Shri P. M. Mehta Gulab Thaker, A.R. For the Respondent : Shri Mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. At the outset, ld. Counsel for the assessee submitted that he has been instructed by the assessee not to press ground no.1. Therefore, we reject the same as not pressed. 4. The second issue raised by the assessee in the ground no. 2 is that ld CIT(A) erred in confirming the order of AO by disallowing the late payment made to employees provident fund for ₹ 28,816/- only. On verification of accounts, the AO noticed that the assessee has not deposited the employee s contribution to PF of ₹ 28,816/- within the due date prescribed under the relevant Act. The AO, after considering judgment of the Hon ble jurisdictional High Court in the case of Gujarat State Road Transport Corporation, 366 ITR 170 disallowed the claim and added the same to the total income of the assessee. In the first appeal before the ld.CIT(A), disallowance was confirmed. Hence the assessee is further before the Tribunal on this issue. 5. Heard both the sides and perused the materials available on record. We note that the Tribunal on number occasions has decided the similar issue by following the judgment of jurisdictional High Court in the case of Gujarat State Road Transport Corporation Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vailable on record. The issue in the present case relates whether the borrowed fund has been utilized in the capital work-in-progress shown in the balance sheet as on 31st March 2011. As per the lower authorities, the borrowed fund has been utilized in the capital work-in-progress in view of the fact that the accumulated loss of the assessee exceeds the fund of the assessee. The ld AR for the assessee before us has not advanced any argument on this issue. Therefore, we have no alternative except to confirm the order of lower authorities. Hence, the ground of appeal of the assessee is dismissed. 10. The next issue raised by the assessee is that ld CIT(A) erred in holding the purchase of stores amounting to ₹ 9,34,104/- as capital expenditure eligible for depreciation. 11. The assessee during the year has incurred an expense of ₹ 13,35,612/- on the purchases of stores. The AO during the assessment proceedings observed that the store's materials are in the nature of giving enduring benefit to the assessee. Therefore same should be classified as capital expenditure, and accordingly the same is entitled to depreciation. On a questioned by the AO, the assessee fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pares are usually charged to the profit and loss statement as and when consumed. The ld CIT(A) after considering the submission of the assessee allowed relief to the assessee in part by observing as under: 13. Decision I have perused the order passed by the A.O. and the submissions made in this regard. I have also seen the paper book filed wherein on page-75 to page-80 bills of such expenditure incurred are enclosed. For the sake of ready reference the bill nos. alongwith the description of machinery purchased is reproduced below:- Pg,no.of Paper book Description Amount Rs. 75 Converter for ultrasonic welding machine and ultrasonic generator 7,18,000 76 Siemens make Digital DC Drive 2,38,000 77 Heat Exchanger for Air Heater 1,00,000 78 Heat Exchanger with cover Complete SS to be replaced with old heat exchanger 90,000 79 Lin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enting the part of the machinery but the ld CIT(A) without finding out any defect in the submission of the assessee has held that the store's purchase is representing capital expenditure. The ld CIT(A) has drawn his conclusion that the stores purchase represents the capital expenditure on the basis of the bills which in our opinion is not correct. The bills cannot be conclusive evidence to hold that the purchase of stores is capital expenditure. We also find support and guidance from the judgment of Hon ble Gujarat High Court in the case of PCIT vs. Banco Aluminium Ltd. reported in 93 taxmann.com 52, wherein, it was held as under: A perusal of the record shows that both the Tribunal and the Commissioner (Appeals) have recorded concurrent findings of facts to the effect that the dies and tools as well as the machinery spares were consumable in nature and have accordingly held the expenditure to be revenue in nature. The fact that in earlier years such expenditure had been treated as revenue expenditure by the revenue has also been taken into consideration. Having regard to the concurrent finding of facts recorded by the Commissioner (Appeals) and the Tribunal, it cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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