TaxTMI 
TaxTMI 
2015 (12) TMI 614
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....bstantive ground challenges the CIT(A)'s order deleting disallowance/addition of Rs. 6,51,333/- made qua machinery repair expenses. The asessee-firm manufactures precision parts. It claimed the impugned expenditure on account of repairing charges for plant and machinery. The written down value of plant and machinery at the beginning of the year was Rs. 25,88,120/. The Assessing Officer quoted case law of CIT vs. Mahalaxmi Textile 66 ITR 710 (SC) and Ballimal Navalkishor (1497) 90 Taxman 402 and observed that where the expenditure in question brings into existence a new asset or the same exceeds 20% of the written down value; it is to be capitalized. He sought to disallow the same. The assessee inter alia pleaded the impugned sum to have bee....
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.... regards machinery parts are concerned, the assessee is engaged in manufacture of precision machinery spare parts, air compression and other related items for the last 20 years. The machinery purchased had become old and needed repairs. Perusal of the machinery maintenance account shows that the expenditure incurred is less than Rs. 25,000 each accept in one case. The appellant argued that the decision of honorable Supreme Court in the case of Mahalakshmi textile and Ballimal Navalkishore relied upon by the AO are distinguishable on facts. 3.3 I have considered the submission made by the appellant and observation of the AO. I have perused through the ledger account of machinery maintenance almost all the expenses are in respect of ....
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.... only. There is no such ratio propounded that as and when a repair exceeds 20% of the WDV, the same would need to be capitalized. The Revenue fails to justify the Assessing Officer's view abovesaid. Its first substantive ground fails. 5. The Revenue's second substantive ground assails correctness of the CIT(A)'s order deleting bad debts disallowance of Rs. 24,80,126/. The lower appellate findings comprise of the assessing authority's observations, assessee's submission as under:- "4.1 This is regarding disallowance of bad debt of Rs. 24, 80, 126/-. In the assessment order the AO has stated that the assessee has claimed these bad debts by writing off the same in the books of accounts, which is due from the central projects and de....
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....onse to the tender invited by the party for the supply of goods. The security deposit has not been returned even after making strenuous efforts for recovery of the amount. The cheques issued by the debtor were deposited in the bank, but they were bounced for want of funds. The assessee has filed a criminal complaint in the court of chief Metropolitan Magistrate Ahmedabad on 17/06/2002. The complaint was also filed with the Gandhinagar police station on 29/09/2001. In view of this reason an amount of Rs. 24, 80, 126/-was claimed as bad debt. The appellant has filed copy of the complaint filed with the police station. The appellant has relied on the decision of Gujarat High Court in the case of Girish Bhagwatprasad. 256 ITR 772 and the decisi....