TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 1684
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....C. In view of the facts and circumstances of the case and in law, Ld. CIT (A) has erred in holding that invoices are for designing, manufacturing and setting up main system for construction power supply whereas these invoices are for setting up "preliminary site enabling facilities" which are essential for providing services to Client but are temporary in nature; hence, the impugned order be set aside. D. In view of the facts and circumstances of the case and in law, Ld. CIT (A) has erred in holding that the invoices are for Transformers, cables, galvanised steel tubes, base plates, switchgear panels etc. which can in no way be classified as temporary structures as per the depreciation schedule whereas all such goods were required to create "site enabling facilities and were to be dismantled after completion of the project; hence the impugned order be set aside. E. In view of the facts and circumstances of the case and in law, the impugned order passed by Ld. CIT (A) fails to consider that site on which the temporary assets were erected does not belong to Appellant and that the contract itself considers the site enabling assets are dismantled once the project awarded in 2013 wa....
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....e in comparison to the delay of 7330 days approximately. 6.1 In view of the above we are of the opinion that when there is sufficient cause for not filing the appeal within the period of limitation, the delay has to be condoned irrespective of the duration/ period of the delay. In this case, the non-filing of an affidavit by the Revenue for opposing the condonation of delay itself is sufficient for condonation the delay of 838 number of days. Thus, we condone the delay of 838 days in filing the appeal and proceed to hear the appeal on merit for the adjudication. In the case of Collector, Land Acquisition vs. MST. Katiji and Ors reported in MANU /SC/0460/1987: 167 ITR 471 SC the Hon'ble Supreme Court held as under: The legislature has conferred power to condone delay by enacting section 5 of the Limitation Act, 1963 in order to enable the courts to do substantial justice to parties by disposing of matters on merits. The expression "sufficient cause" in section 5 is adequately elastic to enable the courts to apply the law in a meaningful manner which subserves the ends of justice- that being the life-purpose of the existence of the institution of courts. A justifiably liberal a....
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....are purely temporary structures and these are not comparable to fixed assets which are constructed over longer duration of useful life. It has also been submitted that due to large work area all individual small components are required for huge numbers and the same are capitalized. 4.3 I have considered the assessment order and submissions of the appellant. As has been noted by the AO also, from the invoices it is noticed that the same are for design, manufacturing and setting up of main system for construction power supply. It was also noted that the invoices are for Transformers, cables, galvanised steel tubes, base plates, switchgear panels etc. which can in no way be classified as temporary structures as per the depreciation schedule. Hence, there appears to be no need to interfere with the order of the AO and the disallowance of depreciation made by the AO is upheld. The only ground of appeal is dismissed. 8. Being aggrieved by the order of the Ld. CIT(A) the assessee preferred the appeal before the Tribunal. 9. The Ld. AR of the assessee submitted that construction of closed shed and porta cabins were purely temporary assets. It was submitted that the assets used for cons....
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....ite once the contract was concluded. The temporary constructions were made only for the purpose of execution of the contract. The land on which temporary construction was constructed is not leased to the assessee and after the completion of the contractual obligation the assessee would remove the all temporary, constructions and vacate the land. 12.In the case of ACIT, Circle 10(1), New Delhi vs Dredging International India Pvt. Ltd. ITA NO 4442 & 4443 /del/2010 the Coordinate Delhi Bench held that : 7.2 We have carefully considered the submissions and perused the records. We find installation of water tank, etc. We find that the structures were erected on the land container units, installation of Instakabins, preparing foundation for the cabins, have any legal rights with regard to these structures. We further find that no structures are not constructed or attached to land, le. they have no earth foundation and no earth which is not owned by the assessee company The assessee company does not per-se flooring. Contractor has made available the land to the assessee company for putting up temporary structures, etc. required for only in connection with the execution of the contractu....
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....expenses incurred by it on construction of temporary structures in the lease property. 7.5 In the background of the aforesaid discussion, we hold that assessee has constructed purely temporary structures. Structures were primarily used for accommodation of the staff. Land beneath these structures is not owned by the connection with contractual work. These structures were not constructed or attached to land i.e. they have no earth foundation and no earth flooring. The cost of temporary structures has been borne entirely by the assessee. The assessee is only allowed non exclusive access to the land for the purpose specified in the contract with Hazira Port. The case laws mentioned above duly support the case of the assessee. Hence, in our considered opinion, there is no infirmity in the order of the Ld. Commissioner of Income Tax (A) on this issue and accordingly, we uphold the same. (ii) In the case of CIT v. Madras Auto service (1998) 6, SCC 404 the Hon'ble Supreme Court held as under : 6. In order to decide whether this expenditure is revenue expenditure or capital expenditure, one has to look at the expenditure from a commercial point of view. What advantage did the assesse....
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.... conclusion) for treating such an expenditure as properly attributable not to revenue but to capital." Whether by spending the money any advantage of an enduring nature has been obtained or not will depend upon the facts of each case. Moreover, as the above passage itself provides, this test would not apply if there are special circumstances pointing to the contrary. This Court in the above case summarised the tests as follows: (p. 44) 1. Outlay is deemed to be capital when it is made for the initiation of a business, for extension of a business, or for a substantial replacement of equipment. 2. Expenditure may be treated as properly attributable to capital when it is made not only once and for all, but with a view to bringing into existence an asset or an advantage for the enduring benefit of a trade. If what is got rid of by a lump-sum payment is an annual business expense chargeable against revenue, the lump-sum payment should equally be regarded as a business expense, but if the lump-sum payment brings in a capital asset, then that puts the business on another footing altogether. 3. Whether for the purpose of the expenditure, any capital was withdrawn, or, in other word....
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.... In the case of L.B. Sugar Factory and Oil Mills (P) Ltd. v. CIT the assessee was carrying on the business of manufacture and sale of sugar. It f had its factory in U.P. The assessee paid a contribution towards meeting the cost of construction of roads in the area around its factory under a sugarcane development scheme. The question was whether this amount was deductible in computing the assessee's profits. The Court held that it was. Because although the advantage secured was of long duration, it was not an advantage in the capital field because no tangible or intangible asset was acquired by the assessee; nor was there any addition to or expansion of the profitmaking apparatus of the assessee. The amount was contributed for the purpose of facilitating the business of the assessee and making it more efficient and profitable. It was, therefore, revenue expenditure. 11. In the case of CIT v. Associated Cement Companies Ltds the respondent-Company entered into an agreement to supply water to the municipality and provide water pipelines as also to supply electricity for a streetlighting and put up a transmission line for that purpose. The assessee also agreed to concrete the mai....