Appellant wins on repair expenses, disallowance dismissed for lack of evidence, loss on asset sale not pursued.

The Tribunal partially favored the appellant by allowing building repair expenses as revenue expenditure and rejecting the disallowance under section 40A(3) due to insufficient evidence. The disallowance of loss on sale of fixed assets as a business loss was dismissed as not pressed during the appeal.

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Issues:
1. Disallowance of loss on sale of fixed assets as a business loss.
2. Disallowance of building repair expenses as capital expenditure.
3. Disallowance under section 40A(3) for payments allegedly in violation of the IT Act.

Analysis:
1. The appellant contested the disallowance of the loss on the sale of fixed assets as a business loss. The Commissioner of Income Tax (Appeals) upheld the Assessing Officer's decision. However, during the appeal before the Tribunal, the appellant did not press this ground, leading to its dismissal as not pressed.

2. Regarding the disallowance of building repair expenses as capital expenditure, the Assessing Officer capitalized expenses of &8377; 3,58,090 after observing that the nature of expenses indicated capital nature, based on the ledger account provided by the assessee. The CIT(A) affirmed this decision, emphasizing the relationship between expenses, asset value, and nature of repairs. However, the Tribunal disagreed, noting that the expenses were for regular repair and maintenance of an old building and allowed them as revenue expenditure, overturning the previous decisions.

3. The disallowance under section 40A(3) was related to payments made to M/s Harsh Auto Care. The Assessing Officer alleged a violation of section 40A(3) due to the splitting of payments below &8377; 20,000. The CIT(A) upheld this disallowance, except for a minor amount. However, the Tribunal found no concrete evidence to reject the appellant's claim and emphasized that suspicion alone cannot replace evidence. Consequently, this ground was allowed, and the appeal was partly allowed by the Tribunal.

In conclusion, the Tribunal's decision partially favored the appellant by allowing the expenses claimed as revenue expenditure and rejecting the disallowance under section 40A(3) due to insufficient evidence to contradict the appellant's claim.

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