DCIT Vs Bajaj Auto Limited (ITAT Mumbai)
The Revenue filed an appeal before the ITAT Mumbai against the order of the Commissioner of Income Tax (Appeals) [CIT(A)], National Faceless Appeal Centre, dated 13 March 2025, for the assessment year 2021-22. The appeal challenged several findings by the CIT(A) in favor of the assessee, Bajaj Auto Limited, relating to the classification and allowability of various expenditures and claims.
1. Expenditure on Dies and Moulds
The primary issue in Ground No. 1 concerned whether expenditure of ₹98.30 crore incurred on dies and moulds should be treated as capital or revenue expenditure. The assessee argued that these were used in the production of parts for its vehicles and were regularly replaced due to wear, tear, or design changes. The expenditure, it said, did not result in the creation of a new capital asset or provide an enduring benefit. Relying on several earlier Tribunal rulings in its own case, the assessee claimed it as a revenue expense.
The Assessing Officer (AO) disagreed, treating the cost as capital expenditure and allowing depreciation of ₹32.31 crore. The CIT(A) deleted the addition, following earlier Tribunal orders that allowed similar claims. The ITAT upheld the CIT(A)’s view, citing consistency with multiple past decisions in the assessee’s own cases and confirming that dies and moulds replacements constitute revenue expenditure.
