IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH : BANGALORE BEFORE SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER AND SHRI KESHAV DUBEY, JUDICIAL MEMBER ITA No.77/Bang/2025 Assessment year : 2012-13

Fine Blanking Private Limited, Revadihal Road, Revadihal, Gokul, Hubballi - 580 030. PAN: AAACF 2752K	Vs.	The Income Tax Officer, Ward 1(1) & TPS, Hubli.
APPELLANT		RESPONDENT

Appellant by : Shri Vinay Kulkarni, CA Respondent by : Ms. Neha Sahay, Jt.CIT(DR)(ITAT), Bengaluru.

Date of hearing : 26.03.2025 Date of Pronouncement : 02.04.2025

O R D E R

Per Laxmi Prasad Sahu, Accountant Member This appeal filed by the assessee is against the order passed by the ld. CIT(Appeals), National Faceless Appeal Centre, Delhi (NFAC) dated 19.11.2024 having DIN ITBA/NFAC/S/250/2024-25/ 1070468316(1) relating to assessment year 2012-13 on the following grounds:-

“1. The order of the learned Assessing Officer in so far as it is against the appellant is opposed to law, equity and weight of evidence, probabilities, facts and circumstances of the case.

2. The appellant denies itself liable to be assessed to a total income of Rs.78,97,340/- as against the total income returned by the appellant of Rs. 51,98,590/- for the impugned assessment year 2012-13 on the facts and circumstances of the case.

3. The Assessing Officer was not justified in disallowing the expenditure incurred on current repairs of machinery in the normal course of business, of Rs.31,75,000/- by stating that the same had to be capitalised on the facts and circumstances of the case.

4. Without prejudice to the contention that the expenditure was in the nature of current repairs of machinery and not capital expenditure, the expenditure ought to have been allowed as expenditure under section 37, of the Act.

5. The appellant craves leave to add, alter, delete or substitute any of the grounds urged above.

6. In view of the above and other grounds that may be urged at the time of the hearing of the appeal, the appellant prays that the appeal may be allowed and appropriate relief be granted in the interest of justice and equity.”

2. Briefly stated the facts of the case are that this is the second round of proceedings before the ITAT. The assessee is engaged in the business of manufacture and sale of auto and electrical components. It filed return of income declaring total income of Rs.51,98,590. The case was selected for scrutiny and statutory notices were issued to the assessee. The AO assessed income at Rs.1,57,96,534 after making various additions. Here the main dispute raised is that assessee has claimed revenue expenditure of Rs.39,81,198, however the revenue department treated it as capital expenditure. Against the 143(3) order, the assessee filed appeal before the First Appellate Authority (FAA) which was dismissed. Aggrieved, the assessee filed appeal before the ITAT. The coordinate Bench of ITAT deleted the other disallowances made u/s. 40(a)(ia) and remanded the matter to the AO to verify and ascertain the true nature of expenditure incurred towards repair of machinery as to whether it is capital or revenue.

3. The appellant in the set aside proceedings filed all the details before the AO and the AO upon appreciation of the same confirmed the disallowance of one item of machinery claimed as revenue expenditure treating it as capital expenditure and allowing depreciation on the same and deleted the other additions. The appellant has in its manufacturing facility several specialised heavy machinery sourced over the years by either importing or sourcing them locally. During the course of hearing before the ld. CIT(Appeals), the assessee relied on various judgments of Hon’ble Apex Court and jurisdictional High Court. The ld. ld.CIT(Appeals) after considering the entire facts, grounds and submissions of the assessee confirmed the order of the AO. Aggrieved from the order of the ld.CIT(Appeals), the assessee filed appeal before the ITAT in the second round.

4. The ld. AR of the assessee re

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