TaxTMI 
TaxTMI 
TaxTMI 
2021 (11) TMI 139
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....ngs u/s. 143(3) of the Income Tax Act, 1961 [in short, 'the Act']; respectively. Heard both the parties. Case files perused. 2. We come to assessee's "lead" A.Y. 2013-14's appeal ITA No. 609/Hyd/2019 raising the following substantive grounds: "2. The Commissioner (Appeals) erred in sustaining half (50%) of the ad hoc disallowance of 25% made in respect of miscellaneous expenditure amounting to Rs. 40,70,292. Having regard to the nature of expenditure location and scale of operations and the fact that there was no banking facility available at the site or nearby villages. the ld. Commissioner (Appeals) ought to have deleted the ad hoc disallowance made by the AO. 3. The Commissioner (Appeals) erred in holding the expend....
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....penditure disallowance made by the Assessing Officer and partly upheld in the CIT(A)'s lower appellate discussion, the learned counsel's sole argument before us is that the same involves various heads incurred at the corresponding civil construction contracts sites wherein banking facilities are not always available. The Revenue's argument on the other hand is that the assessee failed to prove all the impugned expenditure head by filing all the cogent supportive evidence. Faced with this situation and more so when both the parties have failed to justify their respective stands in entirety, we deem it appropriate that a lumpsum estimated disallowance of 8% only than that in issue @25% would be just and proper. We order according....
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....re by the appellant whereas the AO noted that the same has to be capitalized being items of enduring nature. In the A.Y. 2013-14, the above items were capitalized and in the subsequent A.Y. i.e. A.Y. 2014-15 and 2015-16, one more item of Ventilation Ducting was also capitalized. There was no claim of Ventilation Ducting in A.Y. 2013-14. The issue regarding capitalization of these items are discussed separately as under: 1. Rails and Track Cross: The appellant has undertaken the activity of the construction or tunnel. In simple parlance, the appellant needs to construct a model of movement for goods as well as personnel as the tunnel progresses and also for the excavation of the material, as the construction of tunnel progresses. The a....
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....d previous ownerships with regard to that asset. In the present case the asset which is the Rails and Cross Track have been in use with very marginal wear and tear, and are also not consumable items in nature, therefore the AO has rightly held the same as capital expenditure. The appellant stated that the same will be of no use after the project is complete, is a statement of not much consequence or relevance, as the Rails can against be sold in the open market as there has been not much wear and tear and even otherwise the same can be claimed as a sale in the block of asset. The above items are of enduring nature, therefore the action of the AO holding the same as a capital expenditure is upheld accordingly. The AO is however directe....
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....ssue of Railway Track already discussed above. Thus, the Conveyer Belt have enduring usage and is not a consumable and is the structure which is permanent in nature for the construction of tunnel, therefore the same has been rightly held as capital expenditure by the AO accordingly. The AO is however directed to give depreciation on the same accordingly on a year to year basis on such capitalization". The factual position is no different in remaining assessment years wherein the only distinction is that of corresponding sums of disallowance; as the case may be. 5. Learned counsel has taken us to the assessee's case records as well as photographs of the corresponding rail tracks and conveyor belt systems and submits that both the l....