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TMI Blog2010 (1) TMI 1271X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 36,97,528/- being product development expenses, keeping in view the decision of the Hyderabad Bench of the Tribunal in the case of TCI Finance Ltd in 91 TD 573. The AO has also held that these expenses have been incurred for introducing new verities of cereals and represent trial run expenses and expenses incurred on research. Therefore, the AO held that these are capital in nature and not allowable u/s 37(1). 2.2 It was submitted before the CIT(A) that the decision of the Tribunal in the case of TCI Finance Ltd (supra) is distinguishable because the issue in that case was allowability of legal expenses not claimed in the P L account. The Tribunal had held that keeping in view the companies method of accounting, the said e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, he allowed the claim of the assessee. Now, the department is in appeal here before the Tribunal. 3 The ld DR placed reliance on the order of the AO and on the other hand, the ld counsel of the assessee placed reliance on the order of the CIT(A). It was further submitted that no new machinery or assets have been brought during the year by incurring expenditure claimed in P L account. 4 After considering the submissions and perusing the relevant material on record including the details of the expenditure placed on record, we do not find any infirmity in the findings of the ld CIT(A). The findings of the ld CIT(A) have been recorded in para 3.2 at pages 4 5 are as under: 3.2 I have considered the facts in this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the consideration of the above facts the Tribunal held that the expenditure in question was revenue in nature. The Tribunal relied upon the judgement of the Karataka High Court in the case of CIT vs Bharat Earth Movers Ltd 47 CTR 244, and Delhi Bench of the Tribunal in the case of Honda Siel Cars Ltd (ITA 3688) dt 21.2.2006. In the instant case also the appellant has incurred expenditure in its existing line of business of Corn Products. This is clearly not capital in nature and is allowable u/ 37(1). 4.1 Neither the above findings could be controverted by the ld DR nor any other material was brought on record to establish otherwise. No new machinery or assets have been brought during the year under consideration by incurring su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... depreciation allowable from AY 1997-98 to 2001-02 recomputed the depreciation for the year under consideration. The CIT(A) held that the assessee has not claimed depreciation for AY 1997-98 onwards in view of the decision of the Apex Court in the case of Mahendra Mills (supra). Therefore, the depreciation for the years 1997-98, 98-99, 2000-01 and 2001-02 cannot be forced on the assessee for the purpose of the computerisation of the department of the year under consideration. However, since the depreciation has already allowed for AY 1999-00; therefore, on the basis of actual disallowance of depreciation for AY 1999-00, the CIT(A) directed the AO to recompute the depreciation of the eyar under consideration accordingly. In this way, the gr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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