TaxTMI 
TaxTMI 
2016 (5) TMI 959
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....ent was completed at a total income of Rs. 59,12,897/- by treating following expenses as capital in nature: - Furniture & fixtures - Machine spares - Repairs & maintenance 3. Ld. CIT(A) allowed the assessee's appeal. Being aggrieved, the assessee is in appeal before us and has taken following grounds of appeal: 1. On the facts and circumstances of the case and in law, the Ld. CIT (A) has erred in deleting addition of Rs. 59, 12,897/ - made by the AO by capitalizing expenses on Furniture & Fixtures, machine Spares and Repair & Maintenance, which were claimed as revenue expenses by the assessee. 2. On the facts and circumstances of the case and in law, the Ld. CIT (A) has erred in holding that capitalization of the expense should have b....
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....accum heat treatment 2. Plasma ION Nitriding 3. Sub Zero Treatment etc. The process of head treatment is below :- 3. Stress relieving 4. Hardening 5. Tempering almost 3 times 6. Sub Zero on some of the products Fixtures The main fixtures required for the above process that is made of Mild Steel (MS), Stainless steel (55) and Graphite. The fixtures are required for loading product in the furnace, type of fixture required as per type of materials which is going to heat treatment into to furnace. Estimating an accurate expected life of a fixture would be very difficult, since the life of identical fixtures can vary from tool shop to tool shop depending on how they are used, the life of fixtures are depend upon heating/cooling rate, ....
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....r the value of exting assets in increased. We are enclosing herewith some bill given by the parties for repairing work which is ready reference to show that expenditure is a revenue nature. Hence the assessee has debited repairs expenses in their revenue account. Graphite Rod, Block and Hot Zone Box For head shielding in the furnace two layers of graphite elements backed by three layers of stainless steel sheet are required, the use of graphite rod and blocks are one time as once they are heated they can be melt, break or loose so they got unshaped and unusable, we have to change unusable graphite materials on regular basis for smooth running of furnace and maintain quality of products. We use to purchases block for holding graphite ro....
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....job work basis. The nature of work consisted of 3 types of heat treatment of die steel and aerospace components, such as - (i) vacuum heat treatment; (ii) plasma ion nitriding; and (iii) sub zero treatment. From the assessee's submissions, reproduced above, it is evident that heating of items in furnace was done at a temperature up to 1200ċ and also at sub zero temperature. The ld. CIT(A) has very rightly observed that it is obvious that the items loaded in the furnace can suffer major damage due to the extreme temperature. It was explained before ld. CIT(A) that the fixtures were mostly those items on which the products whose heat treatment were to be carried out were loaded and then both the fixture and the product were put inside th....