Case Law Details
ACIT Vs M/s Gillanders Arbuthnot & Co. Ltd. (ITAT Kolkata)
1. Expenses on replantation without any expansion of plantation area or replantation in an abandoned area are not capital expenditure
Capital expenditure involves an investment increasing the capital for higher profit. The expansion means extension of plantation to an additional area. An area already abandoned, if replanted would be an expansion of the area under cultivation for the previous year concerned. The maintenance of an area already under cultivation cannot be treated to be an expansion of the plantation not can it be treated to be an investment or expansion adding to the capital already invested. On the other hand, it would be maintenance of the plantation itself and, therefore, is revenue expenditure.
Held by ITAT
We are of the view that in the light of the admitted factual position that expenses were incurred on plants and for replantation without any expansion of plantation area or replantation in an abandoned area, the expenditure in question cannot be regarded as a capital expenditure.
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