Case Law Details
Ashim Krishna Bhatta Vs ACIT (ITAT Kolkata)
ITAT note that the assessee is an operator of trucks and lorries on hire. During the year, the assessee has incurred expenditure on replacements of old truck bodies which was treated as revenue expenditure however wrongly shown under the head depreciation by claiming 100% of the said expenditure as allowable during the year instead t of charging the expenditure directly to the profit and loss account as the revenue item. We note that the authorities below have not been doubted the genuineness of the expenditure that the assessee has not incurred the expenditure but the dispute was with regard to the nature of the expenses whether to be treated as capital or revenue in nature. According to the assessee’s counsel the said expenditure is revenue in nature and has to be allowed fully against the income of the assessee whereas the tax authorities were of the view this is capital in nature and only depreciation is to be allowed @ 30% without doubting the genuineness of the expenditure. So the issue before us is whether the expenditure is of revenue or capital in nature. We have also perused the decision of Hon’ble Calcutta High Court in the case of CIT vs. Tea Estate Pvt. Ltd. reported in [1992] 198 ITR 535 (Cal) as cited before us by the counsel of the assessee wherein the Hon’ble Court has held that where the assessee has replaced the part of trucks being petrol engine by diesel engine, the said replacement could not be considered as bringing into existence any new asset or any new advantage of enduring character t and therefore expenditure incurred on replacement of said patrol engine by diesel engine was treated as revenue expenditure. Respectfully following the same ratio , we are inclined to hold that the expenditure incurred by the assessee as such on replacement of wooden body of trucks has to be allowed fully against the income of the assessee in the current year.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
This is an appeal preferred by the assessee against the order of the Commissioner of Income Tax(Appeals)-15, Kolkta [hereinafter referred to as ‘CIT(A)’] dated 04.10.2019for the assessment year 2013-14.
2. We note that there is a delay of 32 days in filing this appeal. After going through the application for condonation of delay and after hearing both the sides, we are of the opinion that the cause for delay was reasonable ,so we condone the delay and proceed to hear the appeal.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
