Law:

Section:

I. Section 36(1)(vii)/2 of the Income-tax Act, 1961 - Bad debt - Assessment year 2006-07 Where cheque issued by a party on account of sales made was dishonoured and it was recorded by assessee that amount was not recoverable, bad debts claimed by assessee could not be disallowed [In favour of assessee] II. Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of - Assessment year 2006-07 - Expenses incurred on account of repair of road in assessee's factory premises was allowable as revenue expenditure [In favour of assessee] Where the assessee had incurred expenses on account of repair of road in its factory premises and said expenses had not been incurred for acquiring a new building or road, same was allowable as revenue expenditure. III. Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of - Assessment year 2006-07 - Amount paid for customizing software according to new requirement was allowable as revenue expenditure [In favour of assessee] Amount paid for customizing software according to new requirement whereby only a modification of existing software was brought about and amount was not spent for acquisition of new software, was allowable as revenue expenditure. Ms. Urvashi Dhugga for the Appellant. JUDGMENT Ajay Kumar Mittal, J. - This appeal under s. 260A of the IT Act, 1961 (for short "the Act") has been filed by the Revenue against the order dt. 5th March, 2010, passed by the Income-tax Appellate Tribunal, Delhi Bench 'H', New Delhi (in short "the Tribunal") in ITA No. 4380/Del/2009, relating to the asst. yr. 2006-07. 2. the following substantial questions of law have been claimed for determination by this Court : "1. Whether on the facts and in the circumstances of the case the learned Tribunal was right in law in deleting the disallowance of Rs. 24,33,772 made by the AO on account of capital nature of building repair expenses even though the expenditure resulted in the improvement in the earning capacity of the assessee by way of improving efficiency of the operations or resulted in creation of new assets and advantage of enduring nature benefit of which cannot be limited to the year under…

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