Case Law Details
Ambica Alloys & Steel India Ltd. Vs DCIT (ITAT Ahmedabad)
ITAT Held that replacement of parts of an existing machinery in the course of their working will be a revenue expenditure.
Facts-
The assessee is engaged in manufacturing of steel products of MS Angel, MS Channel and MS Beam. During the course of assessment, the AO noticed that the assessee had debited expenses amounting to 50,97,107/- as expenses on account of purchase of Rolling Mill Rolls and claimed the same as revenue expenditure. The AO issued show cause notice, requiring the assessee to explain why the claim of expenditure on account of purchase of rolls should not be disallowed as revenue expenditure as the use of metal rolls in the rolling mill/steel industries is of enduring benefit and accordingly, higher rate of depreciation at 80% has been specified in the Act.
Being aggrieved by the order of AO, assessee preferred an appeal before CIT(A). CIT(A) upheld the order. Accordingly, assessee preferred the present appeal.
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