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TMI Blog2009 (1) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... the Appellant : Ms Prem Lata Bansal For the Respondent : Mr Ajay Vohra with Ms Kavita Jha and Mr Sriram Krishna JUDGMENT BADAR DURREZ AHMED, J 1. These three appeals pertain to the assessment years 1994-95, 1995-96 and 1997-98 arising out of the common order dated 14.02.2008 passed by the Income-tax Appellate Tribunal in ITA Nos. 294 and 295/Del/2003 and ITA No.1961/Del/2004 respectively. 2. The revenue is aggrieved by the fact that the Income-tax Appellate Tribunal allowed the expenditure incurred by the assessee in connection with the modernization and expansion of, inter alia, its Deoband and Ramkola units by treating the same as expenditure of a revenue nature. The appellant / revenue is further aggrieved by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The tribunal noted the arguments of the learned counsel for the assessee that the administrative expenses were not the actual expenses, but were estimated at 3% of the cost of machinery or building put to use in the years in question. It was also contended that the expenses were not for installation of new machinery or erection of new building or transportation of material and that they were purely administrative expenses of a revenue nature. It was also pointed out that the assessee had undertaken the expansion of its existing sugar mills with a view to enhance their capacities. 5. After hearing the arguments on behalf of the assessee as well as the revenue, the tribunal observed that there was no dispute about the fact that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses incurred by the assessee for the setting up of a new unit, would be of a revenue nature. We find that, in the present case, the tribunal has correctly applied the decision of this court in Relaxo Footwears Limited (supra). The administrative expenses would be of a revenue nature as there was continuity of business. The tribunal, in our view, has correctly concluded that the authorities below had erred in holding the said expenditure to be of a capital nature. We agree with the conclusion of the tribunal that the whole of the expenditure is to be allowed as revenue expenditure and consequently there would be no question of grant of depreciation on such expenditure. 6. In these circumstances, we feel that no interference with th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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