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2011 (7) TMI 1014 - AT - Income TaxNature of Expenditure - Expenses as pre-production expenses - Revenue Expenditure - As per the AO, the assessee itself having shown such expenditure under the head "Pre-production expenses" and having capitalised it as a part of miscellaneous expenses in its balance sheet, could not claim it as revenue outgoes. In the opinion of the learned AO such expenditure could be considered for amortised allowance as specified in section 035D. He, therefore disallowed the claim. HELD THAT:- We are of the opinion that the CIT (A) had rightly relied on the decision of the hon'ble jurisdictional High Court in the case of Rane (Madras) Ltd. [2007 (6) TMI 25 - HIGH COURT, MADRAS] the assessee was an existing manufacturer of permanent magnets is clear from the assessment order and this is mentioned at SI. No. 9 of the facing sheet of the assessment order. Therefore, the assessee was introducing only a new product in the same line of business that it was already engaged in and hence, the amount had to be allowed as revenue expenditure. In these circumstances, we do not find any merit in the appeal filed by the Revenue.
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