2008 (5) TMI 282

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....g the order passed by the CIT (Appeals) directing the AO to allow deduction of Rs. 6,28,968/- in respect of commitment charges paid for issuing debentures ? Whether, the Appellate Tribunal is right in law and on facts in confirming the order passed by the CIT (Appeals) directing the AO to allow deduction in respect of repairs and replacement expenditure which according to the AO amounted to creation of new assets ?" 2. The Assessment Year is 1987-88, the relevant accounting period being Financial Year ended on 31.3.1987. The assessee, a Public Limited Company claimed (i) deduction of Rs. 6,28,968/- in respect of commitment charges; (2) Rs. 1,86,319/- plus Rs. 1,08,092/- plus Rs. 2,16,775/- plus Rs. 2,17,132/- totaling to Rs. 7,28,318/....

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....Learned Standing Counsel read extensively from the order of the Assessing Officer to contend that the findings recorded by the Assessing Officer have not been properly appreciated by Commissioner (Appeals) and the Tribunal. That, in so far as the commitment charges are concerned, the same were incurred for enhancing the working capital and were thus on capital account and were rightly disallowed. In relation to the repairs and replacement expenditure, it was submitted that it was assessee's own case that certain items of plant and machinery were replaced and, therefore, new assets had come into existence giving enduring benefit to the assessee. 7. As can be seen from the facts of the case in relation to the first item of disallowance, Co....

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.... v. Core Health Care Ltd., reported in [2001] 251 ITR 61. The decision of this High Court has since been confirmed by the Apex Court as reported in Deputy Commissioner of Income Tax v. Core Health Care Ltd., [2008] 298 ITR 194 (SC). 9. Therefore, in absence of any error in law and considering the concurrent findings of fact recorded by both, Commissioner (Appeals) and the Tribunal no interference is warranted in relation to the allowability of deduction of commitment charges. 10. In so far as the expenditure relating to repairs and replacement is concerned, Commissioner (Appeals) has found that no new assets came into existence and the entire expenditure was incurred for the purpose of running of existing auto loom shed in a more effi....