2012 (10) TMI 773

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....   PER RAJPAL YADAV, JM The assessee is in appeal before us against the order of Ld. CIT(A)-IX, New Delhi dated 21.12.2010 passed for AY 2006-07. 2. Ground No -2 is the only substantial ground of appeal raised by the assessee. In this ground, assessee pleaded that Ld. CIT(A) has erred in confirming the addition of Rs.1,57,200/- and Rs.37,000/- by treating the expenses as capital in n....

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.... in 86 ITR 647 has observed that expenses incurred towards tender fees for securing contracts is in the nature of capital expenditure. Similarly, he treated the bank guarantee fees as well as loan processing charges as capital expenditure. His brief finding on both the issues reads as under:- "1. Tender Fees Expenses During the year, the assessee has claimed and amount of Rs.1,57,200/- towar....

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....various banks from whom the assessee has taken loan and bank guarantee for executing works contract. The said expenditure are in the nature of capital expenditure. In the case of CIT vs Vullab Glass Works Ltd. 137 ITR 389, the Gujarat High Court held that the payments made to procured bank guarantee is capital expenditure. Hence the above expenditure claimed by assessee is disallowed. 4. On app....

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....sset on lease for a period of 20 years. In the present case, the assessee has been submitting tender in its day-today business which are basically works contract on turn key basis. The assessee has procured orders for sale of its items manufactured. It has to fulfill the tenders floated by State Governments or Electricity Boards. It is not necessary that it will get the order. The tender fees was ....