TaxTMI 
TaxTMI 
TaxTMI 
2001 (10) TMI 279
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....nsideration in asst. yr. 1991-92. This issue has already been decided in favour of the assessee and against the Revenue in ITA No. 1106/Jp/94 wherein it was held that the expenditure incurred only enabled the carrying on of business more efficiently and more economically and that no new asset was created or any property acquired, the expenditure was purely revenue in nature in view of various judgments cited therein." 3. Ground Nos. 2, 5 and 6: (i) Ground No. 2 pertains to expenditure incurred by the assessee for installation of power lines connecting its Vishakapatnam plant with the electricity sub-station. (ii) Ground No. 5 is regarding the construction of link roads on Government lands for facilitating easy and quick flow of traffic t....
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....yment made to the electricity board towards the cost of laying the overhead service line constituted revenue expenditure and was an allowable deduction." 6. The learned Departmental Representative relied upon the order of AO and the learned authorised representative submitted that the company had incurred expenditure for the purpose of creating facilities which would enable smooth and convenient functioning. In terms of Ground No. 2 the power lines as put up, are simply a mechanism to avoid power failure and related problems at the plant site. Though the power line had been erected by the company yet they remain the property of the State Electricity Board. This expenditure was incurred with the singular objective of facilitating routine op....
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....fore, this is capital expenditure. 9. The learned authorised representative argued before the CIT(A) that the two figures are different and one is not included in the other. He stated that Rs. 11,06,666 is 1/3rd of the gross block of the enabling assets consisting of link roads constructed by the appellant on Government land adjoining its mines. He claimed that 1/3rd expenditure should be allowed as in earlier years. As regards the balance figure out of Rs. 19.96 lacs, it was argued that the details are required. As regards Rs. 31.02 lacs, it was argued that the ownership was not with the appellant but with the Government and, therefore, no asset came into existence. It was pointed out that on the same principle the expenditure in respect ....
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....Mills (P) Ltd. vs. CIT (1980) 19 CTR (SC) 185 : (1980) 125 ITR 293 (SC); (2) Hindustan Machine Tools Ltd. vs. CIT (1988) 71 CTR (Kar) 166 : (1988) 175 ITR 220 (Kar); (3) Laxmiji Sugar Mills Co. (P) Ltd. vs. CIT (1971) 82 ITR 376 (SC); (4) Gwalior Rayon Mfg. (Wvg.) Co. Ltd. vs. CIT (1988) 72 CTR (MP) 57 : (1988) 172 ITR 131 (MP); and (5) CIT vs. Bongaigon Refinery Ltd. (1997) 141 CTR (Gau) 154 : (1996) 222 ITR 208 (Gau); 12. We have considered the rival submissions. We find that the expenditure on road has been incurred for facilitation of routine operations and smooth functioning of transport system. These roads have been constructed on the Government land. No new asset has been acquired by the assessee. It was held in the case of Hind....
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....ares, are taken into stock on estimate basis and corrected later on for discrepancies and deviations through physical checks. The estimations are made on the basis of time-honoured standards. Such procedure has been accepted in the past especially by the CIT(A) in asst. yr. 1989-90. The AO was speculatory in apprehending manipulations through removals of relevant items without proper authorisation. He failed to appreciate that the internal control measures were by themselves so strong that nothing of the kind was ever possible. To cap that, the widespread security network would make any escapade with material virtually impossible. 14. Further, the finished goods as manufactured by the assessee cannot be sold to all and sundry, because in t....