TaxTMI 
TaxTMI 
2019 (4) TMI 576
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.... as appeal of the Revenue is concerned, the ld.counsel for the assessee at outset submitted computation sheet showing that by virtue of relief granted by the ld.CIT(A) tax effect involved in the appeal is only Rs. 15,02,883/-, which is below monetary limit stipulated by the CBDT vide Instruction bearing no.3 of 2018 dated 11.08.2018 for filing appeal before the ITAT by the Revenue. Tax effect calculated by the assessee is as under: Sr. No. Grounds of appeals Amount (Rs.) Grounds of appeal raised by the Department A.Y. 2010-11 1 Deletion of income on alleged Unaccounted Turnover based on the information consequent to search by Excise Authorities and Report of DGCEI. (Being 20% profit on alleged unaccount....
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....o approach the Tribunal for recall of this order. Such application should be filed within the time period prescribed in the Act. 5. Now we take appeals of the assessee for the assessment years 2010- 11 and 2011-12. 6. Assessee has taken four grounds of appeal in each assessment year. In brief, its sole grievance is that the ld.CIT(A)has erred in confirming the disallowance of Rs. 39,53,249/- out of Rs. 52,70,999/- and disallowance of Rs. 28,55,917/- out of Rs. 38,07,890/- in the Asstt.Year 2010-11 and 2011-12 respectively by treating them as unexplained expenditure incurred in the capital field instead of treating them in the revenue account for repairs and maintenance to plant & machinery. The facts on all vital points are common in ....
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....s incurred in the replacement of fire bricks and structures made out of steel and SS & MS plates and other assessories which are installed at the Furnace. The company is manufacturing Glaze Frit which requires heating of the raw material , in the process of manufacturing upto 1500 C. This heating at such high temperatures damages the fire tunnels made from fire bricks and also structures made out of steel and SS & MS Plates ad other accessories thereof. These fire bricks and a short life due to temperature up to 1500C and required to be replaced whenever the same is damaged by cracks or breakage of steel/SS & MS structures. The crack and the breakage result into leakage of heat and the temeperature inside the furnace is not uniform and cons....
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.... report and the submissions of the appellant The expenditures disallowed by the AO as revenue expenditures are in the nature of purchase of MS steel plates, angles, shapes, bars, flanges etc. the AO has made a detailed analysis of the expenditure on repairs and maintenance incurred by the appellant company in its own case for different financial years as well as other companies involved in similar line of business as that of the appellant company. After this analysis, the AO has given a finding that the repair and maintenance expenses being claimed by the appellant company are on a much higher side. In the submissions made during the course of the appellate proceedings, the appellant has submitted that such computation can be made only in r....
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....ature of business of the appellant company, it is held that 25% of such expenses can be allowed as revenue expenditure as needed for the purposes of repair of plants and machineries. The disallowance of balance expenditure as made by the AO is upheld. The appellant gets part relief accordingly." 9. Before us, the ld.counsel for the assessee reiterated his contentions as were raised before the AO. On the other hand, the ld.DR relied upon the orders of the Revenue authorities. 10. Section 31 of the Income Tax Act provides allowance of expenditure towards current repairs to the plant & machinery and furniture as well as insurance expenditure incurred upon it. It contemplates that expenditure for repairs shall be on account of current rep....
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....ull machinery within one or two years, then it would not come under concept of "current repair". The AO has observed that the assessee has incurred expenditure to the extent of 60.93% of the value of the machinery in the Asstt.Year 2010-11 and 31.58% in A.Y.2011-12, meaning thereby, by way of this method, almost 92% expenditure were incurred in two years on the value of the plant & machinery. It amounts to replacement. The ld.CIT(A) in this background has rightly observed that other companies in similar line were incurred expenditure to the extent of 2% to 6%, whereas the assessee has incurred expenditure at 43%. The ld.CIT(A) rightly upheld disallowance of expenditure partly by treating it in the capital field. We do not find any error in ....