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2009 (1) TMI 444 - RAJASTHAN HIGH COURTCapital or Revenue Expenditure- The return for the assessment year 1991-92 was filed by the assessee on December 13, 1991, showing a total income of Rs.341,99,319. However, a revised return was filed by the assessee on January 4, 1993, showing a loss of Rs.43,72,27,027. In the revised return, the assessee claimed deduction under section 37 of the Act of 1961 on account of investment in construction of Ghosunda Dam as revenue expenditure. The expenditure was incurred by the assessee in construction of part of the dam inasmuch as it required a large quantity of water for day-to-day operation of its super smelter located at Charideria. The Assessing Officer disallowed the same on the ground that the expenditure incurred in construction of Ghosunda Dam was of capital nature. That apart, the deduction claimed by the asses see in respect of expenditure on the guest house was also disallowed by the Assessing Officer. Commissioner (Appeals) and Tribunal allowed the expenditure. Held that- appeal filed by revenue partly allowed. Order passed for treating the expenditure incurred by the assessee in construction of the Ghosunda Dam as revenue expenditure is affirmed. However the order for reducing the guest house expenses disallowed by the assessing officer from Rs. 15,40,667 to Rs. 4,07,522 is set aside and the order passed by the Assessing Officer is restored.
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