TaxTMI 
TaxTMI 
2011 (2) TMI 143
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....el/2009, relating to the assessment year 2006-07. The following substantial questions of law have been claimed for determination by this Court: 1- "Whether on the facts and in the circumstances of the case the learned ITAT was right in law in deleting the disallowance of Rs. 24,33,772/- made by the Assessing Officer on account of capital nature of building repair expenses even though the expenditure resulted in the improvement in the earning capacity of the assessee by way of improving efficiency of the operations or resulted in creation of new assets and advantage of enduring nature benefit of which cannot be limited to the year under consideration only? 2- Whether on the facts and in the circumstances of the case the l....
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....33,772/- was held to be of capital nature and, therefore, 10% depreciation was allowed thereon. The assessing officer, thus, after considering the matter ordered disallowance of a sum of Rs. 21,90,435/- being expenses of capital nature by order dated 22.12.2008. The assessing officer further ordered disallowance of a sum of Rs. 2,50,000/- out of the total amount claimed by the assessee under the head "Software Expenses". Yet another disallowance was made by the assessing officer, i.e. of an amount of Rs. 3,79,802/- out of the total claim of the assessee on account of bad debts under the head 'irrecoverable balances written-off". The Commissioner of Income-tax (Appeals) {in short "the CIT(A)"} dismissed the appeal preferred by the assessee, ....
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....conducive to use it in a way, it is desired that the road within the factory and department was required to be better placed by laying stones and bricks on the same. As rightly contended by the learned AR, all the expenses which give an enduring benefit do not amount to capital expenditure. This was so held by the Hon'ble Supreme Court in the cases of Empire Jute Co. Ltd. Vs. CIT, 124 ITR 1 and Alembic Chemical Works Co. Ltd. vs. CIT, 177 ITR 377. By incurring such expenses the business was carried more efficiently, but did not bring into existence any capital asset. Therefore, the expenses on laying Kota Stone and bricks on the floor used in the factory premises are allowable as revenue has accepted the same to the extent of Rs. 2 lakhs bu....
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....to change of software to suit the new requirement due to change in taxation or other procedural changes. The software is customised according to new requirement for which the amount is paid. By spending such sum only the existing software is modified and hence are allowable as revenue expenditure. Another sum of Rs. 3,25,000/- was incurred to debug the present software to run it smoothly. By incurring such expenses there were modification in the existing software but not acquisition of new software. Therefore, the expenses are revenue in nature and hence allowable as such." (C) Claim of assessee relating to bad debts 14. We have considered the rival submissions. As per the copy of account filed, the assessee has written off the amount....
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....rred for acquiring a new building or the road. It was further recorded that the road was existing in the premises and since the same was not conducive to use in a way it was desired, certain repairs were required to be carried out. On the basis of these findings, the expenses incurred thereon were held to be revenue in nature. No error or perversity could be pointed out by the counsel for the appellant in the aforesaid finding. Adverting to the expenses incurred on software, the Tribunal held the same to be revenue in nature as the amount was paid for customising the software according to new requirement whereby only a modification of the existing software was brought about and the amount was not spent for acquisitioning of the new software....