TaxTMI 
TaxTMI 
2011 (1) TMI 26
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....ons of identical nature were made by the Assessing Officer, which were deleted by the CIT (A) and the order of the CIT (A) has been confirmed by the Income Tax Appellate Tribunal (hereinafter referred to as „the Tribunal) vide common judgment dated 11.02.2010. Additions were of the following nature: (a) Depreciation on custom duty payment; (b) Expenditure on the glow sign board; and (c) Depreciation on UPS. 3. Insofar as the first item of addition is concerned, the background of the facts is that the assessee company had imported machinery under duty exemption certificate issued by the Ministry of Finance. Because of this certificate issued in favour of the assessee, the assessee did not pay any custom duty on the import o....
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.... (SC); Tuticorin Alkali Chemicals & Fertilizers Ltd. Vs. Commissioner of Income Tax 227 ITR 172 (SC); Kedarnath Jute Manufacturing Co. Ltd. Vs. Commissioner of Income Tax 82 ITR 363 and Sutlej Cotton Mills Ltd. Vs. Commissioner of Income Tax 116 ITR 1 (SC) wherein it is held that even if the liability is challenged and the legal proceedings are pending, once the amount has gone out of the coffers of the assessee, the assessee would be entitled to capitalize the same. The Tribunal while dealing with these judgments held as under: "At the outset we are convinced with the arguments made by Shri Salil Aggarwal, advocate, that mere book entries are not decisive of any income. The question is whether a receipt of money is taxable or not, wheth....
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....ing the impugned year and therefore, the liability to pay the amount had accrued to the Assessee during the year itself and the said liability cannot be said to be contingent and cannot be said to be an advance payment. The order of the learned Commissioner (Appeals) is a reasoned order, who has rightly accepted the contention and explanation of the Assessee and has rightly allowed the claim of the Assessee for capitalisation of the payment of excise duty amounting to Rs. 4,25,34,027 and has rightly directed the assessing officer to allow the depreciation on the said amount. We find no infirmity in the order of the learned Commissioner (Appeals). Thus ground No. 1 of the revenue is dismissed." 6. We are in agreement with the aforesaid ap....
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.... the expenditure incurred thereupon was capital in nature. He was also influenced by the fact that till the previous year, the assessee had itself capitalized the expenditure and only from the Assessment Year 2005-06, accounting policy in regard to incurring on expenditure on glow sing boards was changed by the assessee. 9. The CIT (A) deleted this addition holding it to be expenditure of Revenue in nature. 10. The order of the CIT (A) has been upheld by the Tribunal and in arriving at the conclusion that the expenditure was of revenue nature, the Tribunal has followed the judgment of the Punjab & Haryana High Court in the case of Commissioner of Income Tax Vs. Liberty Group Marketing Division [(2009) 315 ITR 125]. 11. We have gone....