2014 (12) TMI 1445

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...., represented on behalf of the assessee and Shri Uday Kumar Sardar, JCIT, Sr. D.R., represented on behalf of the Revenue. 3. At the time of hearing, it was submitted by the ld. A.R. that the only issue in the assessee's appeal was against the action of the ld. CIT(Appeals) in confirming the disallowance of the claim of depreciation made by the assessee and set off against the interest income. It was the submission that the assessee-company is an infrastructure development company engaged in the construction and development of the Durgapur Expressway. It was the submission that the assessee had received the interest income on short-term deposit and the assessee had claimed the depreciation on the assets acquired by the assessee-company, w....

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.... machinery equipments are assets and it was utilized for the business. The above question we have summarized has been answered by the Division Bench of the Madras High Court in case of Commissioner of Income Tax v. Sakthi Soyas Ltd. reported in [2006] 283 ITR 194 (Mad). In that judgment it was held on the principle of law as follows:- "Capitalisation of those expenditure in the books of account alone was not the decisive factor in examining an expenditure for the purpose of income-tax. The name given to an expenditure or a nomenclature given to an expenditure in the books of account of the assessee is not the litmus test to decide the exact nature of expenditure for the purpose of income-tax. The purpose of the Companies Act is dif....

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.... sum as a revenue expenditure, then that legal right of the assessee is not self estopped by the treatment given by the assessee to it in its own books of account. It appears that the authorities below have heavily relied on the account in view of Section 145 of the Act. In view of sub-section (3) of the same the said subsection has given ample discretion of the assessee with regard to correctness and completeness of any account of the assessee in case where the method of accounting provided in sub-section (1) or accounting standards as notified under sub-section (2) have not been regularly followed by the assessee, the Assessing Officer may make an assessment in the manner provided in Section 144. We think that the aforesaid sub-s....