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TMI Blog2024 (9) TMI 367X X X X Extracts X X X X X X X X Extracts X X X X ..... Magnesite Ltd [ 2018 (6) TMI 1236 - MADRAS HIGH COURT] by judiciously following the decision of the Hon ble Madras High Court we have no hesitation to delete the addition made by the Revenue Authorities and allow Ground raised by the assessee. - Shri Duvvuru Rl Reddy, Hon ble Judicial Member And Shri S Balakrishnan, Hon ble Accountant Member For the Assessee : Shri GVN Hari, AR For the Department : Dr. Satyasai Rath, CIT(DR) ORDER PER SHRI S BALAKRISHNAN, ACCOUNTANT MEMBER: 1. This appeal is filed by the assessee against the order of Learned Commissioner of Income Tax (Appeals), [Ld.CIT(A)], National Faceless Appeal Centre (NFAC), Delhi in DIN Order No. ITBA/NFAC/S/250/2023- 24/1052850996(1) dated 15.05.2023 arising out of order passed u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that this Techno Economic Feasibility Report was incurred for the same line of business carried on by the assessee. He therefore pleaded that the addition may be deleted. Ld.AR placed reliance on the following case laws: i. Decision of the Hon ble Kolkata High Court in the case of Binani Cement Ltd., v. CIT dated 23.03.2015 [(2016) 380 ITR 0116 (Cal)]. ii. Decision of the Co-ordinate Bench of Visakhapatnam in the case of SAR Chandra Environ Solution (P.) Ltd., v. ITO dated 10.08.2015. 4. Per contra, Ld. Departmental Representative [hereinafter in short Ld. DR ] submitted that the expenditure incurred for the Techno Economic Feasibility Report is capital in nature and should be considered as a capital expenditure. Ld. DR further s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars, the assessee abandoned the project and treated the expenditure as revenue in nature and charged to the Profit Loss Account of the assessee under the General Administrative expenditure during the Financial Year 2013-14 relevant to Assessment year 2014-15. The point of contention of the Ld.AR is that no new asset has been created with enduring benefit and hence it cannot be treated as a capital expenditure deserves consideration. Further the assessee being an entity which was brought into existence by the Major Port Trust Act, 1963 and engaged in providing various facilities at Visakhapatnam Port. It is also undisputed fact that the expenditure for the Techno Economic Feasibility Report amounting to Rs. 5,56,18,200/- was for creation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nduct of the assessee, but on account of the decision of the Government of Tamil Nadu. In our considered view, the decision of the Government of Tamil Nadu to sell the project is a very important fact, which has to be borne in mind to decide as to whether the expenditure incurred by the assessee was capital or revenue in nature. 26. The Assessing Officer fell in error in going by the fact that the expenditure was incurred from the capital account forgetting that the test to be applied to ascertain as to whether the expenditure is revenue or capital is not based on where the funds were drawn from. The broad parameters and tests, which have been laid down by various decisions are that there should be an enduring benefit, which should accrue t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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