2010 (6) TMI 846

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....Accountant Member. This is an appeal filed by the Revenue raising following grounds:- (1) The ld. CIT(A)-XIV, Ahmedabad has erred in law and on facts in deleting the disallowance of Rs. 6,21,172/- made by the AO on account of garden expenses. (2) The ld. CIT(A)-XIV, Ahmedabad has erred in law and on facts in deleting the disallowance of Rs. 5,57,335/- made by the AO on account....

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....that Revenue has not filed any appeal against the decision of ld. CIT(A) in Asst. Year 2004-05 and 2005-06 and, therefore the issue is settled in favour of the assessee. Even otherwise according to the ld. AR the expenditure incurred on maintenance of garden is revenue expenditure. He relied on the decisions of Hon. Bombay High Court in Zenith Steel Pipes Ltd. vs. CIT (1990) 185 ITR 126 (Bom) and ....

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....fresh in the open air. It is undisputed position of law that any expenditure for the welfare of the employees would be revenue expenditure. Expenditure incurred for maintenance of garden is primarily for healthy and soothing environment. Even though it adds value to the factory building but for that reason alone expenditure so incurred cannot be considered as capital and be disallowed. It can be s....

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....ltration expenditure have been entered into RG 23C part II meant for capital goods, the AO held that expenditure so incurred is capital in nature. He accordingly disallowed the claim under section 37 but allowed the depreciation thereon @ 15%. This resulted in an addition of Rs. 5,57,335/-. The ld. CIT(A) on the other hand, allowed the claim of the assessee on the ground that - (i) book entry will....