2009 (7) TMI 65

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....in allowing expenditure made by the assessee for the purchase of two machines in the relevant year. The third issue canvassed is that ITAT has erred in allowing expenditure incurred by the assessee on its R&D office and the same ought not to have been allowed. 2. Qua the first issue, the facts which have emerged from the record are that the possession of the flat was obtained on 21.3.2000, the deed in respect of the same was registered on 29.3.2000 (though the Sub-Registrar returned it to the assessee on 7.4.2000), the charges to the society where the flat is situated were paid on 29.3.2000, One consignment was sent to this office/flat through M/s. Mayur Roadways, and the flat had been fitted with the requisite amenities for using it as ....

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....re, in the said case allowed depreciation allowance to the assessee and said that there was no justification to disallow the claim of the depreciation. In fact, the Division Bench of this Court had even much earlier in Capital Bus Services Pvt. Ltd. held that the expression used for the purpose of the business and depreciation would be allowed where the buses were kept ready by the owner for its use. Merely because the buses did not ply cannot mean that the depreciation was not allowable. We accordingly hold that the contentions of the Revenue on this issue have no force. 3. So far as the contention with regard to the disallowing the claim on the expenditure incurred on the purchase of two machineries is concerned, the counsel for the Re....

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....e liability to pay. Once the goods have been purchased, the invoices raised and the purchase considerations are accounted for in the books of the assessee, the expenditure can be said to have been incurred as per the method of accounting followed by the assessee. Counsel for the assessee has rightly relied upon the judgment reported as Belapahar Refractories Ltd. vs. CIT, 2007 ITR 144 (Orissa) in which the Division Bench of the Orrisa High Court has held that incurring of expenditure for scientific research means "to become liable to" i.e. to incur a debt and at such time the expenditure can be said to have been incurred. It was further held that the expression "incurring" includes either an actual payment or that the concerned person has b....