Sec. 37 of Income Tax Act, 1961 – Business Expenditure – The assessee incurred expenses of consumption and replacement of stores and spares of Rs. 9,548.68 lakhs and claimed the same as revenue expenditure. However, out of that, the AO disallowed Rs. 3,00,96,651/– treating it as capital expenditure after allowing the depreciation of Rs. 45,14,498/– thereon. The AO made disallowance of net amount Rs. 2,55,82,153/– on the ground that the items are in the nature of independent machine and average life span is 5 years or more and in one item life span is 20 years which suggests that these items can be used independently. The CIT(A) deleted the additions disallowance made by the AO the order of CIT was confirmed by ITAT. Thus, revenue preferred the present appeal. High Court while dismissing the appeal of the Revenue held that:- the AO has accepted this issue in its set–aside assessment order for A.Y. 1999–2000 passed u/s.143(3) read with section 250 of the Act and then Since, the revenue has accepted this issue in the set–aside assessment proceedings, therefore, there is no infirmity in the order of CIT(A) — Pr. CIT vs. GUJARAT NARMADA VALLEY FERTILIZER & CHEMICALS LTD. [2020] 423 ITR 54 (GUJ)