2016 (12) TMI 1849

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....ioner of Income-tax (Appeals)- 11, Chennai. 2. Appeal filed by the Department is delayed by three days. Condonation petition has been filed. Reason shown for the delay seems to be justified. Ld. Authorised Representative did not raise any serious objection. Delay is condoned. Appeal is admitted. 3. Facts apropos are that assessee engaged in the business of manufacturing and selling motor vehicle parts, had filed return of income for the impugned assessment year disclosing income of Rs. 1,41,43,14,595/-. During the course of assessment proceedings, it was noted by the ld. Assessing Officer that assessee had debited a sum of Rs. 20,21,20,000/- as power and fuel charges. From the breakup of expenditure furnished by the assessee ld. Asses....

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....had paid such sum and claimed such amount as revenue outgo u/s.37(1) of the Act. However, ld. Assessing Officer was of the opinion that the claim could not be allowed. According to him, additional power infrastructure created gave enduring benefit to M/s. Ford India Pvt. Ltd. and it was not a routine business expenditure. The said infrastructure facility was shown as an asset by the M/s. Ford India Pvt. Ltd. in its books of accounts. As per ld. Assessing Officer capital expenditure could not become a revenue expenditure just for a reason that it was incurred in connection with business activities or for efficiently carrying out day to day business. Further, as per Assessing Officer infrastructure installed by the M/s. Ford India Pvt. Ltd. w....

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....ital expenditure. 6. Opening the arguments, ld. Departmental Representative submitted that creation of additional infrastructure for supplying electricity resulted in enduring benefit to M/s. Ford India Pvt. Ltd as well as the assessee. As per the ld. Departmental Representative this however did not result in creation of any intangible asset for the assessee. The asset remained in the books of M/s. Ford India Pvt. Ltd. Thus according to him, ld. Commissioner of Income Tax (Appeals) though he was correct in upholding the expenditure as capital outgo, erred in directing the ld. Assessing Officer to grant depreciation thereon. 7. Per contra, and in support of its cross objection, ld. Authorised Representative submitted that when the outg....