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TMI Blog2020 (10) TMI 136X X X X Extracts X X X X X X X X Extracts X X X X ..... iture Written off - Rs. 92,63,156/-. (ii) Disallowance on account of repairs treated as capital expenses - Rs. 11,45,026/-. (iii) Addition on account of interest on income tax refund - Rs. 3,41,268/-. 2.1 Aggrieved, the assessee carried the matter to the Ld. First Appellate Authority. The Ld. CIT (A) upheld the disallowance on account of Deferred Revenue Expenditure. The Ld. CIT (A) also upheld the disallowance of repairs. With respect to interest on Income Tax Refund, the Assessing Officer (AO) was directed to verify the contention of the assessee and compute the correct interest for the purposes of taxation. 2.2 Now, the assessee is before this Tribunal and has challenged the findings of the Ld. CIT (A) by raising the following grounds of appeal: "1. That the CIT (A) erred on facts and in law in confirming the order of the assessing officer in making a disallowance of Rs. 92,63,156 on account of deduction for deferred revenue expenditure incurred in respect of maintenance and overall check-up (in compliance with DGCA guidelines) of helicopter EC145 taken on lease. 1.1 That the CIT (A) erred on facts and in law in confirming the order of the assessing officer in making t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the same. 2.3 That the CIT (A) erred on facts and in law in confirming the order of the assessing officer in making the aforesaid disallowance without appreciating that the issue under consideration pertained to mere timing difference of deduction, which should not be pressed much by the Department. 3. That the CIT (A) erred on facts and in law in not directing the assessing officer to delete the addition of Rs. 3,41,268 made on account of interest on income tax refund, since, the said interest was never received by the appellant. 3.1 That the CIT (A) erred on facts and in law in not appreciating that the Income-tax Department had not provided any details of tax refund provided to the appellant and therefore, the same could not be bifurcated into principle and interest separately. The appellant craves leave to add, alter, amend or vary from the aforesaid grounds of appeal at or before the time of hearing." 3.0 The Ld. Authorized Representative (AR) submitted that Ground No.1 challenges the disallowance of Rs. 92,63,156/- made on account of deduction for deferred revenue expenditure in respect of maintenance and overall check-up of helicopter EC145 taken on lease. It wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng depreciating thereon. The Ld. Authorized Representative submitted that an amount of Rs. 19,08,376/- had been incurred on repairs and maintenance of Aircrafts which had been disallowed by the Assessing Officering by treating the same as being capital in nature and capitalizing the same under the head on 'Aircrafts' and, thereafter, allowing depreciation @ 40% thereon. The Ld. Authorized Representative submitted that the repairs had been in the nature of repairing the 'Primary Adaptive Display', and 'Tail Rotor Blade Assembly'. The Ld. Authorized Representative submitted that the repairs of these two components parts do not increase the useful life of the Aircraft and that their replacement is in the nature of revenue expenditure. It was submitted that both these units were found faulty and were not required to be replaced as per the DCGA guidelines and therefore the same was not a capital expenditure. Reliance was placed on the judgment of the Hon'ble Apex Court in the case of New Shorrock Spinning and Manufacturing Co. Ltd. vs. CIT [1956] 30 ITR 338 (SC) and also in the case of Mr. Ballimal Naval Kishore vs. CIT reported in [1997] 224 ITR 414 (SC). Reliance was also placed on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d vouchers in the Paper Book filed before us. It has also been submitted by the Ld. Authorized Representative that the impugned expenditure had been allowed by the Assessing Officer in the earlier two Assessment Years i.e., 2010-11 and 2011-12 in 143(3) proceedings. However, the copy of those two Assessment Orders have not been filed before us so as to enable us to ascertain as to whether the same was examined b the Assessing Officer in those two assessment years. In the year under consideration, the issue does not seem to have been examined by the Assessing Officer in the proper perspective i.e. with reference to the lease agreement. We also note that even the Ld. CIT (A) did not examine the relevant documents. Therefore, it is our considered opinion that the issue be restored to the file of the Assessing Officer for duly considering the claim of the assessee after going through contents of the lease deed as well as the relevant bills and vouchers. It is so directed accordingly. While the Assessing Officer is re-examining the issue, he should also consider the factum of similar expenditure having been allowed in 143(3) proceedings in Assessment Years 2010-11 and 2011-12. The Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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