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2011 (8) TMI 1190 - HC - Income TaxNature of expenses - pre-project expenses - Allowable business expenditure - Held that:- In the present case, the expenses related to two projects, namely, Ayirumthengu Project and Bhimji Project. The said projects had to be abandoned due to stiff resistance from local to carry out exploratory drilling by the foreign company and also on account of environmental problems and presence of of Oliva Ridley turtles, a rare specie of turtles around the coastal area. The tribunal has recorded a finding of fact that the nature of the assessee's business is mining of ore and for achieving that object it has to carry out exploration activities. The outcome of such exploration is always contingent. The exploration activities being the regular line of assessee's business, expenses incurred on such activities have been allowed as revenue expenditure.
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