2017 (10) TMI 1155

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.... made by Assessing Officer on account of capital expenditure since the assessee company could not furnish any document or record to establish the allowability of the expenditure claimed as revenue in nature before assessment proceedings as well as before remand proceedings." 2. Facts of the case in brief are that the assessee filed his return of income on 29.09.2011 declaring NIL income. Later on the case was selected for scrutiny. The A.O. asked the assessee as to why the following expenses not be disallowed and added back to income of the assessee. Date Party Amount Reason Hyva Tractor Running Expense HC1L PEPL JC CMDG 31.08.2010 Regional office  5,58,099/- Capital Expenditure 20.01.2011 State bank 60....

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....1,18,997/-   -do- Peartree HO- siwan amchine 11.05.2010 Infratech Sollutions 1,11,910/- -do- 12.05.2010 Ramaa machinery  53,025/- -do- Peartree HO Sheikhpura machine 27.04.2010 Entech Engineers 1,05,000/- -do- 11.06.2010 Puzzlon 1,08,403/- -do- 27.07.2010 Puzzlon 2,68,805/- -do- 03.03.2011 Drill Tech 1,75,548/- -do- 15.03.2011 Drill Tech 1,30,771/- -do- 26.03.2011 Puzzlon 5,92,389/- -do- TOTAL 63,94,004/-   2.1 In response, the assessee submitted as under : "3. Copies of bills are being submitted herewith as asked for at point no. 15 of letter dated 01.01.20....

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....of Revenue Expenditure being incurred on rollers, seal kits, bus, bolts etc. 24.04.2010 CDSS Rs. 1,02,500/- 29.07.2010 Waliram Taneja Rs.4,57,183/- 07.02.2011 Waliram Taneja Rs.84,181/- 09.02.2011 RD Wireless Rs.85,000/- 11.05.2010 Infratech Sol Rs.1,11,910/- 12.05.2010 Ramaa Machinery Rs.53,025/- 11.06.2010 Puzzlon Rs. 1,08,403/- 27.07.2010 Puzzlon Rs.2,68,805/- 15.03.2010 Drill Tech Rs.1,30,771/- TOTAL Revenue Expenditure Rs.14,01,778/-   Remaining amount as detailed above in nature of capital expenditure to be disallowed & added back to income of the assessee for Rs. 49,92,226/- (63,94,004-14,01,778/-)" 3. Being aggrieved, the assessee....

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....as per the fixed assets schedule, the opening balance in the Gross block, Plant & machinery and vehicles as on 01.04.2010 are recorded at Rs. 38,65,16,258/- & Rs. 1,97,49,729/- respectively. This indicates that the appellant was required to incur routine expenditure on maintenance of plant & machinery and vehicles etc. utilized in its civil construction business. The Bills/Vouchers produced have been examined. It is seen that there are certain items of expenditure which prima facie are capital in nature. From the details of bills enclosed summarized as Annexure 1, item No. 12 are bills of Rs. 8,67,245/- of M/s Larsen & Toubro Ltd. are pertaining to comprehensive repair of machinery. Similarly, item No. 14 is a bill of Rs. 4,52,400/- of Lars....