WELSPUN ZUCHHI TEXTILES LTD, MUMBAI V. ACIT 2(3), MUMBAI

ITA 6160/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100583 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 16-07-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 21-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S T BIDARI
• Assessee Lawyers: MITESH SHAH
• Keywords: Capital asset; Depreciation; Business expenditure; Earning of tax free income; Proportionate interest; Initiation of penalty proceedings; Speculation loss; Revenue expenditure; Capital expenditure
• Section: 143(3); 14A; 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH G, MUMBAI BEFORE SHRI D.KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA NO.6160/MUM/2013 ASSESSMENT YEAR: 2009-10 M/S. WELSPUN ZUCCHI TEXTILES LTD. TRADE WORLD, B WING, 9 TH FLOOR, KAMALA MILLS COMPOUND, SENAPATI BAPAT MARG, LOWER PAREL, MUMBAI-400013 PAN:AAACW1259N VS. ACIT 2(3 ) , AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MITESH SHAH REVENUE BY : SHRI S.T. BIDARI DATE OF HEARING : 17.07.2015 DATE OF PRONOUNCEMENT : 12.08.2015 O R D E R PER D. KARUNAKARA RAO, AM: THE PRESENT APPEAL PREFERRED BY THE ASSESSEE, IS DI RECTED AGAINST THE IMPUGNED ORDER DATED 13.08.2013 PASSED BY THE CIT(A )-6, MUMBAI FOR THE AY-2006-07. THE CIT(A) PARTLY ALLOWED THE APPEA L OF THE ASSESSEE 2 ITA NO. 6160/M/201 3 AND SAME MADE BY THE ASSESSING OFFICER (AO) U/S. 14 3(3) OF THE INCOME TAX ACT (HEREINAFTER REFERRED THE ACT) VID E ORDER OF AO DATED 04.02.2013. THE GROUNDS RAISED BY THE ASSESSEE READ AS FOLLOWS:- THE GROUND OR GROUNDS OF APPEAL ARE WITHOUT PREJUDI CE TO ONE ANOTHER. 1.A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) ERRED IN CONFIRMING THE ACTION OF THE AO IN TREATING REPAIRS & MAINTENANCE EXPENSES OF RS . 42,40,811/- AS CAPITAL EXPENSES AND THEREBY FURTHER ERRED CONFIRMING THE EFFECTIVE ADDI TION OF RS . 38,16,730/- MADE BY THE AO AFTER ALLOWING DEDUCTION FOR DEPRECIATION OF RS. 4,24,081/-. B) THE LD. CIT(A) FAILED TO APPRECIATE THAT EXPENDI TURE INCURRED TO IMPROVE CONDITION OF EXISTING INTERNAL ROADS AND RE PLACEMENT OF FLOORING WOULD BE REVENUE EXPENDITURE AND NOT A CAP ITAL EXPENDITURE. 2.A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. AO ERRED IN CONFIRMING THE ADDITION OF RS. 77,2 17/ - MADE BY THE AO TO THE INCOME OF THE APPELLANT BY WAY OF DISALLO WING PROPORTIONATE INTEREST AND EXPENDITURE CLAIMED TO HAVE BEEN INCUR RED RELATING TO EXEMPT INCOME INVOKING THE PROVISIONS OF SECTION 14 A R.W. RULE 8D. B) THE LD. CIT(A) FAILED TO APPRECIATE THAT THERE I S NO REASON AND BASIS IN REACHING TO DIS-SATISFACTION BY THE AO WITH THE CORRECTNESS OF THE CLAIM OF THE APPELLANT THAT NO EXPENDITURE WAS INCU RRED IN RELATION TO DIVIDEND INCOME WHICH DOES NOT FORM PART OF THE TOT AL INCOME. C) IN REACHING TO THE CONCLUSION AND CONFIRMING SUC H ADDITION THE LD. CIT(A) OMITTED TO CONSIDER RELEVANT FACTORS, CONSID ERATIONS, PRINCIPLES AND EVIDENCES WHILE HE WAS OVERWHELMED, INFLUENCED AND PREJUDICED BY IRRELEVANT CONSIDERATIONS AND FACTORS. 3. THE LD. CIT(A) ERRED IN HOLDING THAT THE ISSUE O F INTEREST 234B, 234C AND 234D OF THE INCOME TAX ACT, 1961 IS CONSEQUENTI AL. THE APPELLANT DENIES ITS LIABILITY FOR SUCH INTEREST. 4. THE LD. CIT(A) ERRED IN HOLDING THAT THE GROUND RAISED DISPUTING THE INITIATION OF PENALTY PROCEEDINGS U/S.271(1)(C) OF THE INCOME TAX ACT, 1961 IS PRE-MATURE. THE APPELLANT DENIES ITS LIABIL ITY FOR SUCH PENALTY. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956 AND ENGA GED IN THE BUSINESS OF MANUFACTURE OF BATHROBES. THE ASSESSEE FURNISHED ITS E-RETURN OF INCOME ON 26.09.2009 SHOWING TOTAL INCO ME OF RS. 3 ITA NO. 6160/M/201 3 1,88,26,761/-. THE RETURN OF INCOME WAS PROCESSED U /S. 143(1) ACCEPTING THE RETURNED INCOME. THE CASE WAS SELECTE D FOR SCRUTINY BY ISSUING NOTICE U/S. 143(2) ON 18.08.2010. MAKING TH E ASSESSMENT U/S. 143(3) OF THE ACT, THE ACIT 2 (3), MUMBAI (I.E. THE LD. AO) MADE CERTAIN ADDITIONS/DISALLOWANCE VIDE ITS ORDER DATED 04.02.2 013 AS UNDER: A) MARK TO MARKET LOSS RS . 1,06,02,713/- B) LOSS IN FOREIGN EXCHANGE TREATED AS SPECULATION LOSS RS . 74,70,482/- C) REPAIRS & MAINTENANCE TREATED AS CAPITAL EXPENDITURE(NEW FLOOR & NEW ROAD RS . 38,16,730/- D) DISALLOWANCE U/S. 14A OF THE ACT. RS . 77,217/- 3. AGGRIEVED BY THE ORDER DATED 04.02.2013, THE ASS ESSEE FILED AN APPEAL BEFORE THE CIT(A) THEREBY TAKING SEVERAL GRO UNDS. THE LD. CIT(A) DISALLOWED SOME GROUNDS AND DISMISSED OTHERS. CIT(A ) CONFIRMED THE ADDITION RELATING TO THE TREATING OF THE REPAIR & M AINTENANCE EXPENSES OF RS . 42,40,811/- AS CAPITAL EXPENSES ON THIS ISSUE, CI T(A) CONFIRMED THE EFFECTIVE ADDITION OF RS . 38,16,730/-. CIT(A) ALLOWED THE DEDUCTION FOR DEPRECIATION OF RS . 4,24,081/- OUT OF THE TOTAL CLAIM OF RS . 42,40,811/-. THE CIT(A) IS OF THE VIEW THAT THE SAI D EXPENDITURE OF RS . 42,40,811/- WAS INCURRED IN CONSTRUCTION OF NEW ROA D AS WELL AS THE REPLACEMENT OF FLOORING AND THEREFORE, EXPENDITURE FALLS IN CAPITAL FIELD. 4. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESS EE FILED THE PRESENT APPEAL BEFORE THE ITAT. 5. DURING THE PROCEEDING BEFORE US, THE LD. AUTHORI SED REPRESENTATIVE (AR) SUBMITTED THAT THE ORDER DATED 04.02.2013 PASSED 4 ITA NO. 6160/M/201 3 BY THE AO AND THE IMPUGNED ORDER OF CIT(A) ARE REQU IRED TO BE SET- ASIDE. 6. THE LD. AR SUBMITTED THAT DURING THE YEAR, THE A SSESSEE HAD CLAIMED THE AGGREGATE EXPENDITURE OF RS . 53,41,290 UNDER THE HEAD REPAIRS & MAINTENANCE OF BUILDING. OUT OF THIS AN AMOUNT OF RS . 15.64 LAKHS WERE INCURRED ON FLOORING OF FACTORY PREMISES AND OTHER AMOUNT OF RS . 26.76 LAKHS WAS INCURRED ON THE INTERNAL ROAD IN THE COMPOUND OF THE FACTORY PREMISES. THE AO HELD THAT THESE EXP ENDITURE IS CAPITAL IN NATURE AND AFTER ALLOWING THE DEPRECIATION, HE MADE A NET DISALLOWANCE OF RS . 38,16,730/-. THE OBSERVATION OF AO IN THIS REGARD IS AS UNDER: 6.1 THE CONTENTIONS OF THE ASSESSEE ARE CONSIDERED . HOWEVER THE SAME IS NOT ACCEPTABLE AS THE BILLS PRODUCED BY THE ASSESSEE SHOWS THAT THE WORK DONE WAS NOT REPAIR/REGARDING BUT REL AYING OF THE FLOOR AND ROAD ENTIRELY. 6.2 THE BILL PRODUCED BY THE ASSESSEE FOR THE REPAI R OF FLOORING READS AS FOLLOWS: I) PROVIDING AND LAYING POLISHED /COTA STONE {DIAMO ND CUT} FLOORING 20MM (AVG) THICK BASE OF CEMENT MORTAR 1:4 (L CEMEN T: 4 COARSE SAND) LAID OVER WITH M/C CUT EDGES SAND JOINTED WIT H GREY CEMENT SLURRY MIXED WITH PIGMENT TO MATCH THE SHADE OF THE SLAB INCLUDING RUBBING SAND MIRROR POLISHING AS PER DESIGN COMPLET E AND EXISTING FLOOR ROUGHING BY A PNEUMATIC HAMMER. [AREA 2556.72 SAME AMOUNT: 15,64,496 THE DESCRIPTION OF THE WORK NARRATED IN THE BILL SH OWS THAT A NEW FLOORING WAS LAID [EITHER TO REPLACE AN EXISTING FL OOR OR AT A NEW PLACE]. THE NARRATION NOWHERE MENTIONS THAT IT WAS REP AIR/ OR FILLING OF FLOOR. 6. 3 THE BILL PRODUCED BY THE ASSESSEE FOR THE REPA IR WORK OF ROAD READS AS FOLLOWS: MAKING OF RCC ROAD IN M 20 GRADE WITH BROOM FINISH ON TOP OF THE SURFACE AREA AND FABRICATING AND PLACING IN POSITIO N FOR STEEL REINFORCEMENT FOR RCC WORK INCLUDING CUTTING, BENDI NG, BINDING AND COST OF BINDING WIRE ETC. INCLUDING WASTAGE AND ROL LING MARGINS ETC.: AMOUNT: 26,76,315' 5 ITA NO. 6160/M/201 3 THE DESCRIPTION OF THE WORK NARRATED IN. THE BILL S HOWS THAT A NEW ROAD WAS LAID [EITHER TO REPLACE AN EXISTING ROAD O R AT A NEW PLACE]. THE NARRATION NOWHERE MENTIONS THAT IT WAS REPAIR/ OR FILLING OF POTHOLES. FURTHER THE REINFORCEMENT OF STEEL WITH R CC IS NOT A PART OF FILLING POTHOLES OR REPAIRING ROADS, THIS PROVES THAT THE EXPENDITURE INCURRED IS NOT FOR REPAIRS, THE EXPEND ITURE HAS RESULTED IN CREATION OF A FIXED ASSET, THE BENEFIT WHICH IS ENDURING IN NATURE. 7. THE LD. AR FURTHER SUBMITTED THAT THE ASSESSEE-C OMPANY IS ENGAGED IN MANUFACTURING OF BATHROBES AT FACTORY PR EMISES SITUATED AT GIDC, VAPI (GUJARAT) SINCE LAST 32 YEARS. PROPER MAI NTENANCE OF ASSETS LIKE BUILDING, PLANT & MACHINERY, ETC. IS AN INEVIT ABLE PART OF ANY BUSINESS ACTIVITY AND IF IT IS NOT DONE AT A RIGHT TIME, THEN IT IS POSSIBLE THAT THE ASSETS MAY BECOME UNSUITABLE FOR THE FUTUR E. IN REGARD TO ASSETS IT CAN TAKE DIFFERENT FORMS AND NAME, JUST AS REPAIR, RENEWAL, RECONSTRUCTION, REPLACEMENT OR RENOVATION, ETC. FOR ALLOWABILITY OF EXPENDITURE, NOMENCLATURE USED HAS NO RELEVANCE. SO FAR AS THE FLOORING IS CONCERNED, A PART OF FLOORING WAS IN SUCH A POOR CONDITION THAT CONTINUOUS DUST WAS BEING GENERATED AND THE SAME WA S CORRECTED BY RE-DOING THE DAMAGED PART OF FLOORING WITH KOTA STO NE. FURTHER, THE ROAD SURROUNDING THE FACTORY PREMISES REQUIRED RESU RFACING, SINCE IT WAS UNEVEN AND HAD LOT OF POT HOLES. HENCE, THE EXPENDI TURE INCURRED IS REVENUE IN NATURE AND THE DISALLOWANCE WAS UNCALLED FOR. 8. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESEN TATIVE (DR) REPRESENTING THE REVENUE HAS SUBMITTED THAT THE ORD ERS PASSED BY THE AO DO NOT WARRANT ANY INTERFERENCE AND FURTHER SUBM ITTED THAT FROM THE DESCRIPTION OF THE WORK DONE AS WELL AS ON THE BASI S OF BILLS SUBMITTED BY THE ASSESSEE, IT IS A CLEAR CASE WHERE THE ASSES SEE HAS LAID A NEW FLOOR AND A NEW ROAD HAS BEEN CONSTRUCTED AT ITS FA CTORY PREMISES DURING THE YEAR UNDER CONSIDERATION, THEREFORE, THE SAME AMOUNTS TO 6 ITA NO. 6160/M/201 3 CREATION OF A NEW ASSET AND HENCE, THE DISALLOWAN CE OF RS . 38,16,730/- IS CAPITAL IN NATURE. 9. WE HAVE HEARD BOTH THE COUNSEL FOR THE ASSESSEE AS WELL AS THE REVENUE. THE ISSUE FOR ADJUDICATION RELATES TO THE E XPENDITURE INCURRED ON LAYING OF FLOOR REPLACING THE OLD ONE IN THE FAC TORY PREMISES AND THE RENOVATING OF THE EXISTING ROAD IN THE FACTORY, CON STITUTERS A CAPITAL EXPENDITURE AND THEREFORE, SUCH EXPENDITURE IS TO B E CAPITALIZED AND ALLOW THE DEPRECIATIO. AFTER HEARING THE PARTIES AS WELL AS PERUSING THE ORDERS OF THE REVENUE AND CIT(A), WE ARE OF THE CON SIDERED VIEW THAT IT IS UNDISPUTED FACT THAT THE CONSTRUCTION ACTIVITIES TOOK PLACE IN THE FACTORY PREMISES IN THE SHAPE OF ROAD AS WELL AS FL OORING. NOW IT IS TO BE SEEN THAT AS TO WHETHER THE SAID CONSTRUCTION WAS A REPLACEMENT OF OLD CONSTRUCTION OR WAS A NEW CONSTRUCTION WITH THE FAC TORY. IT IS SUBMITTED ON THE PART OF THE ASSESSEE THAT THE PART OF FLOORI NG WAS IN SUCH A POOR CONDITIONS THAT DUST WAS BEING GENERATED WHICH RESU LTED IN QUALITY PROBLEMS WITH MANUFACTURING OF BATHROBES AND OTHER TEXTILE/GARMENTS ITEM. THE SAME WAS CORRECTED BY REDOING THE DAMAGE PART OF FLOORING AS KOTA STONE. IT WAS FURTHER SUBMITTED BY THE LD. AR THAT THE ROAD SURROUNDING THE FACTORY PREMISES, REQUIRED RESURFAC ING SINCE IT WAS UNEVEN AND HAD LOT OF POT HOLES AFFECTING THE MOVEM ENT OF HEAVY TRANSPORT VEHICLES WHICH ARE BEING USED TO PICKUP A ND DROP OFF GOODS. THESE DEFECTS HAVE BEEN CORRECTED WITH PAVE BLOCKS. THUS BOTH THE FLOORING AS WELL AS INTERNAL ROAD WERE OLD AND CONT INUOUSLY USED SINCE LAST 32 YEARS. IN THIS REGARD THE LD. AR FURTHER SU BMITTED THAT THERE WAS NO OTHER PLACE FOR CARRYING OUT NEW ROAD OR NEW FLO ORING IN THE FACTORY. 7 ITA NO. 6160/M/201 3 10. AFTER HEARING THE RIVAL SUBMISSIONS AND CONSIDE RING THE NATURE OF BUSINESS AND VOLUME OF OPERATION, WE ARE OF THE VIE W THAT THE ASSESSEE IS MAINTAINING HUGE PREMISES FOR ITS MANUFACTURING PROCESS. THE ROAD WHICH WAS UNEVEN WITHIN THE FACTORY PREMISES, IS RE QUIRED TO BE EVENED OUT FOR THE SMOOTH OPERATION AND FUNCTIONING. HOWEV ER, BY LAYING DOWN SUCH STONES, THE ASSESSEE MERELY FACILITATES THE CA RRYING ON THE EXISTING BUSINESS MORE EFFICIENTLY BUT DID NOT ACQUIRE ANY N EW BUILDING OR ROAD. AS PER ASSESSEE, THE ROAD WAS EXISTING IN THE PREMI SES, BUT DUE TO THE FACT THAT THE SAME WAS NOT CONDUCIVE TO USE IT IN A WAY, IT IS DESIRED THAT THE ROAD WITHIN THE FACTORY AND DEPARTMENT WAS REQUIRED TO BE BETTER PLACE BY LAYING STONES AND BRICKS ON THE SAM E. AS RIGHTLY CONTENDED BY THE LEARNED AR, ALL THE EXPENSES WHICH GIVE AN ENDURING BENEFIT, DO NOT AMOUNT TO CAPITAL EXPENDITURE. THIS WAS SO HELD BY THE HONBLE SUPREME COURT IN THE CASES OF EMPIRE JUTE C O. LTD. VS. CIT, 124 ITR 1 AND ALEMBIC CHEMICAL WORKS CO. LTD. VS. CIT 1 77 ITR 377. 11. WE HAVE ALSO GONE THROUGH THE PROVISIONS OF SEC TION 37(1) OF THE I.T. ACT WHICH EXPRESSLY EXCLUDES THE ALLOWABILITY OF CAPITAL EXPENDITURE EVEN THOUGH WHOLLY AND EXCLUSIVELY LAID OUT OR EXPE NDED FOR THE PURPOSES OF THE BUSINESS. FURTHER, AS PER THE CASE OF THE ASSESSEE, RE- DOING OF FACTORY FLOORING AND INTERNAL ROADS RESULT ED IN IMPROVEMENT OF OPERATION OF EXISTING SYSTEMS WITH GREATER EFFICIEN CY AND PROFITABILITY AND AVOIDING HEALTH HAZARDS BUT AT THE SAME TIME IT DID NOT INCREASE THE VOLUME OF PRODUCTIVE CAPACITY SINCE THE SAME HAS BE EN INCURRED FOR EXISTING FACILITIES WHICH TURNED TO IN BAD SHAPE. I N SUPPORT OF HIS CONTENTIONS THE LD. AR RELIED UPON THE FOLLOWING JUD ICIAL PRONOUNCEMENT: IN SUPPORT OF OUR CONTENTION WE ALSO RELY ON THE F OLLOWING JUDICIAL PRONOUNCEMENTS:- 8 ITA NO. 6160/M/201 3 1. THERE WAS NO FRESH CONSTRUCTION AND THAT WHAT WA S DONE WAS TO RESTORE THE BUILDING TO ITS EARLIER POSITION AND TO REPAIR THE DAMAGE CAUSED BY THE FIRE TO THE HOTEL BUILDING. THE TRIBU NAL HELD THAT THE EXPENDITURE WAS REVENUE EXPENDITURE. [CIT VS GRAND HOTEL 189 ITR 153, 154 (ALL)]. 2. EXPENDITURE INCURRED BY ASSESSEE ON REPAIRS TO I MPROVE BAR CONDITION OF BUILDING WHICH WAS USED FOR ITS BUSINE SS PURPOSE WAS TO BE ALLOWED AS BUSINESS EXPENDITURE. [DCIT VS. SANDO Z: (P) LTD. 137 ITD 326 (MUMBAI)]. 3. EXPENSES INCURRED BY ASSESSEE ON RENOVATION OF O FFICE IS ALLOWABLE AS REVENUE EXPENDITURE. [CIT VS. LUCENT T ECHNOLOGIES HINDUSTAN LTD. 345 ITR 407 (KARNATAKA)] 4. EXPENSES ON REPAIR MADE TO BUILDING WHICH WAS NE CESSARY FOR BUSINESS WAS ALLOWABLE AS REVENUE EXPENDITURE. [CIT VS. BHUPINDERA FLOUR MILLS LTD. 20 TAXMANN.COM 593 (PUNJAB & HARYA NA)] 5. EXPENSES INCURRED IN ACCOUNT OF REPAIR OF ROAD IN ASSESSEE'S FACTORY PREMISES WAS ALLOWABLE AS REVENUE EXPENDITU RE. [CIT VS. VOITH PAPER FABRICS INDIA LTD. 22 TAXMAN.COM 48 (PU NJAB & HARYANA)] 6. IF EXPENDITURE IS INCURRED ONLY TO RECTIFY THE S TRUCTURAL DEFECTS AND THERE IS NO ADDITION TO THE ASSETS, THEN THE EXPEND ITURE IS REVENUE EXPENDITURE [CIT VS. I.C.I (INDIA) LTD. 139 ITR 105 (CAL)] 7. GUNITING IS A SOPHISTICATED PROCESS OF PLASTERIN G WORK, MEANT TO PRESERVE AND MAINTAIN ALREADY EXISTING ASSET. EXPEN DITURE INCURRED ON SUCH WORK IS, THEREFORE, ALLOWABLE AS REVENUE EX PENDITURE. THE MERE FACT THAT THE WORK PROLONGED THE LIFE OF THE B UILDING CANNOT MAKE THE EXPENDITURE A CAPITAL ONE. [CIT V. OXFORD UNIVERSITY PRESS 108 ITR 166 (BOM). 8. REPLACING FALSE CEILING OF A CINEMA HALL AFTER D EFECTS WERE POINTED OUT BY THE EXECUTIVE ENGINEER [CIT V. BHARAT CINEMA /121 ITR 165 (PUNJ)]. 9. EXPENDITURE INCURRED ON REPLACEMENT OF PIPE-LINE , ON WATER- PROOFING OF STAFF QUARTERS, ETC. [PERMALI WALLACE L TD. V. CIT 151 ITR 43 (MP)]. 12. ON THE FACTUAL MATRIX OF THIS CASE, WE FIND IT IS NOT THE FACT THAT SAID FLOORING OF THE PREMISES OR LAYING OF THE ROAD IN THE FACTORY PREMISES IS DONE FOR THE FIRST TIME AND THEREFORE, NEW ACTIVITIES. IN OUR OPINION, IT IS THE PART OF THE MAINTENANCE OF THE E XISTING ASSETS. AFTER 9 ITA NO. 6160/M/201 3 GOING THROUGH THE AFOREMENTIONED JUDICIAL PRONOUNCEM ENTS, WE ARE OF THE CONSIDERED OPINION THAT BY INCURRING SUCH EXPEN SES AS MENTIONED BY THE ASSESSEE, THE BUSINESS IS BEING CARRIED OUT MOR E EFFICIENTLY AND IT DO NOT BRING INTO EXISTENCE OF NEW CAPITAL ASSETS. WE THEREFORE, HOLD THE EXPENSES TO BE REVENUE IN NATURE. ACCORDINGLY, THE GROUNDS RAISED IN THE APPEAL ARE ALLOWED. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 TH DAY OF AUGUST, 2015. SD/- SD/- (AMIT SHUKLA) (D.KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 12.08.2015 SHARWAN P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR G BENCH BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.