TaxTMI 
TaxTMI 
2014 (3) TMI 61
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....uted initially under the Act of Parliament i.e. Delhi Agricultural Produce marketing Regulation Act, 1976, repealed by Delhi Agricultural Produce marketing Regulation Act, 1998. Under the provisions of the Act, the Committee is a body corporate constituted to provide facilities to the farmers and the persons visiting the market for marketing of notified agricultural produce in Azadpur Mandi, Delhi, and to do other acts in relation to superintendence, directions and control of market for regulating marketing of agricultural produce. The assessee claimed that being a local authority established under Delhi Agricultural Produce market (Regulation) Act, 1976, now, the Delhi Agricultural Produce market (Regulation) Act, 1998 has been granted exemption under section 10(20) of the Income Tax from payment of tax. The Income tax authorities did not accept the contention of the Agricultural Produce Marketing Committee, Azadpur, (hereafter 'APMC'), on the issue that they are a local authority. The issue was settled firstly by the Tribunal in favour of Agricultural Produce Marketing Committee, Azadpur and then by Hon'ble Delhi High Court that Agricultural Produce Marketing Committee, Azadpur i....
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....IT(A) who vide its order dated 05.03.2010 decided the issue regarding contribution made to the Delhi Agricultural Marketing Board (DAMB) as statutory payment and as such directed the Assessing Officer to delete the addition of Rs.7,64,43,623/- from the income of the assessee. However, disallowance on account of expenses incurred on account of maintenance of market yard (electrical) and market yard (civil) is concerned, the ld CIT(A) allowed further expenses to the extent of Rs.54,53,332/- to be revenue in nature. However, expenses amounting to Rs.2,38,84,959/- on account of repairs and maintenance of market yard (Civil) as well as electrical have been declared capital in nature. The assessee is aggrieved that no reason has been shown as to how the electrical expenses to the tune of Rs.2,38,84,959/- are capital in nature and also even though it has been declared the expenses as capital it is not been granted any depreciation. 7. The grounds raised both by the assessee and the revenue are the same and only the figures are different. The grounds raised by the assessee in the Assessment Year 2004-05 are follows:- "1. That the learned CIT(Appeals)-XXII is not justifie....
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....pital in nature whereas the assessee had debited the same in the Income & Expenditure account as the expenses were revenue in nature and were recurring expenses. 3. That the learned CIT (Appeal)-XXII was not justified in disallowing part of the maintenance of the entertainment expenses. 4. That the learned CIT (Appeal) XXII & learned A.O. did not allow depreciation on the capital expenditure added in the income which a person is entitled to as consequence. 5. That the learned ACIT/CIT (Appeal) were not justified in charging interest under section 234-A, 234-B and 234-C of the Income Tax Act. 6. That the appellant craves leave to add, alter, vary, amend or withdraw any one or more of the grounds of appeal at the time of hearing." 10. The grounds raised by the Revenue in the Assessment Year 2006-07 are as follows:- "1. The Ld CIT(A) erred in law and on facts in deleting the addition of Rs. 54,53,332/- out of Rs. 2,93,38,291/- made by the Assessing Officer on account of capital expenses claimed by the assessee as revenue expenditure. 2. The Ld. CIT(A) erred in law and on facts in deletin....
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.... attention was invited to various citations and precedents laid down by the Hon'ble Supreme Court and High Courts in this respect. In the case of Assam Bengal Cement Co. Ltd. V. Commissioner of Income-tax (1955) 27 ITR 344 (SC), their Lordships of the Supreme Court observed as under:- "If the expenditure is made for acquiring or bringing into existence an asset or advantage for the enduring benefit of the business it is properly attributable to capital and is of the nature of capital expenditure. If on the other hand it is made not for the purpose of bringing into existence any such asset or advantage but for running the business or working it with a view to produce the profit it is a revenue expenditure. If any such asset or advantage for the enduring benefit of the business is thus acquired or brought into existence it would be immaterial whether the source of the payment was the capital or the income of the concern or whether the payment was made once and for all or was made periodically. The aim and object of the expenditure would determine the character of the expenditure whether it is a capital expenditure or a revenue expenditure. The source or the manner of ....
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.... items and allowed it as revenue expenditure for relevant assessment year 2004-05 under consideration and some of which are as follows:- 1. Major repair/ remodeling of roads 2. Major repair of Pathways/ foothpath at Okhla Mandi 3. Major repair of Pathways and Footpath of NFM and NSM, Azadpur 4. Major repair of Flooring at POMA shed, NSM 5. Widening of road 6. Major repair of roads at Okhla Mandi 7. Repair of steps of NSM/ NFM 8. Major repair of Bye-lane and Roads at NSM and NFM, Azadpur 9. Major repair of Boundary wall and footpath of tomato shed 10. Building Plan charges 11. Reconstruction of Gully Chamber in NSM, Azadpur 12. Major repair of Steel buffers at NSM, Azadpur 13. Painting marking of roads at NSM, NFM, Okhla Mandi 14. Covering of open portion of drain at NSM, Azadpur 15. Repair and reconstruction of boundary wall 16. Improvement of Dhallow at Azadpur 17. Connecting Pump well to drain 18.....