2013 (12) TMI 1

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....t appreciating the fact that the AO considered the said expenditure as capital expenditure. 2. Relevant facts are that the assessee is engaged in the business of manufacturing of pharmaceuticals and carrying its activities from its factory at Goregaon. The factory of the assessee was registered and holding a license from Government (Food and Drugs Authority) ( hereinafter referred to as FDA) for carrying such manufacturing activities. During the inspection of the factory of the assessee by FDA, several anomalies/discrepancies were found with regard to lay out and the aesthetics of the factory. The concerned authority refused to renew license and directed the assessee to carryout changes in the manufacturing area before manufacturing lice....

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....xpenditure incurred by the assessee is on account of repairs carried on, on the directions of FDA and not day to day repairs. Hence, the assessee has got enduring benefit and it cannot be considered to be routine expenditure to run factory by the assessee. Ld. DR also referred the decision of Hon'ble Delhi High Court in the case of Modi Spinning & Weaving Mills Co. Ltd. V/s CIT [1993] 200 ITR 544 (DELHI) and the decision of Hon'ble Apex Court in the case of CIT V/s Ramaraju Surgical Cotton Mills [2008] 166 Taxman 356 (SC). 5. On the other hand, Ld. AR supported the order of ld. CIT(A) and submitted that details of expenditures incurred by the assessee are contained at pages 1 to 23 of the paper book. He submitted that no new asset has be....