TaxTMI 
TaxTMI 
1990 (12) TMI 120
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.... machinery and other assets to the work site. Similarly, on completion of the project, these assets are transferred either to other sites or to the Head Office. During the year 1980-81, the assessee had purchased Casagranda Piling Equipment worth Rs. 14,80,022 from M/s. Boodai Trading Company, Kuwait, for executing Daquq Chai work in Iraq. It was used in the said project and the after the work was over, the equipment was brought to India on 6-8-1982. On such repatriation, the Government of India charged customs duty of Rs. 4,46,297 which, though was capitalised in assessee's books of accounts, was claimed to be revenue expenditure in the assessment proceedings. It was not allowed by the Assessing Officer and we find no discussion in the ord....
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....ITR 513. 15. The learned Departmental Representative, on the other hand, supported the order of the CIT(A) and submitted that when the work was over in Iraq, the machinery remained of no use in Iraq and, therefore, by shifting it to India, the assessee had acquired a benefit of enduring nature which was towards capital field. The facts of this case, he submitted, are exactly similar to the case before the Supreme Court in the case of Sitalpur Sugar Works Ltd., referred to by the CIT(A). The customs duty paid by an assessee for acquiring the capital asset would be a part of the cost of the equipment of the assessee, and in similar way, the customs duty paid by the assessee when the equipment is imported to India for the first time would a....
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....t and machinery is erected and put to use, any expenditure incurred by the assessee thereafter in connection with such asset would be on revenue account as in that case, the expenditure would be for the user of the capital asset and not an expenditure which would be towards capital field. Enduring benefit in both the cases would be there, but in one case it was for the user of the capital asset, a sort of an expenditure incurred in the course of carrying on day-to-day operations of the business and in the other case, it would be for acquisition and bringing into existence a capital asset. 17. As held by Their Lordships of the Calcutta High Court in the case of Hind Construction & Engg. Co. Ltd., the question whether a particular expendit....
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....an expenditure incurred for acquiring an additional plant, which was capital in nature, and an expenditure incurred in dismantling or shifting of an existing plant to a better site. In the case before the Supreme Court, the factory was shifted from Sitalpur, a place suffered from ravage of floods and as a consequence sugar-cane of good quality in sufficient quantity became unavailable at that place. In that context, it was held that the shifting was with a view to improve the business. There the shifting gave an enduring benefit to the assessee of a permanent character and in a capital field. The shifting of plant and machinery at a better site was considered to be an enduring benefit to the assessee. As clarified by the Supreme Court in th....