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Exp. incurred by ‘Apollo Tyres’ to purchase equipments for its dealer’s showroom is capital expenditure: HC

September 18, 2021[2021] 130 taxmann.com 296 (Kerala)

INCOME TAX : Tribunal was correct in treating expenditure incurred by assessee, in showroom of its dealers for purpose of promoting sale of products of company as capital expenditure on ground that ownership of these assets was retained by assessee and these findings of fact recorded by Tribunal being based on record did not fall within scope of section 260A

• It is found that Assessing Officer had referred to auditor's report for coming to conclusion that expenditure made by assessee towards purchase of equipment, such as wheel balancer/wheel aligner/wheel changer/tyre changer, was capital expenditure but not revenue expenditure. Spreadover utility or utilization of equipment over a period of a few years is not disputed. Location of equipment could be in shops of respective dealers or dealers were allowed to use equipment, that cannot be understood as divesting ownership of assessee on equipment. Commissioner, as rightly pointed out by Tribunal, assumed something more than what was either available in circumstances of case or made out literally a new case in favour of assessee. Hence this order was not appealable.

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