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2015 (5) TMI 316 - HC - Income TaxExpenditure incurred for the development of the land - capital expenditure or revenue expenditure - Held that:- Main objects of the assessee-appellant company as emerging from the memorandum of association reveals that the appellant company has been set up by the Punjab Government to undertake work of land development, seed multiplication, processing and its distribution and sale. Further, the appellant is empowered to under take, assist and promote operations pertaining to agriculture, horti culture, fisheries, poultry, piggery, sheep and dairy and other related activities. The appellant company is also empowered to process, sale, purchase, import export, etc., and otherwise deal in all kinds of produce of agriculture, horticulture, etc. In sum and substance, the main objectives of the appellant company are to undertake, assist and also carry out operations pertaining to agriculture. Notably, the objectives of the appellant also relate to seed multiplication and diversification of crop pattern in the State to go towards high value and less water intensive crops. Evidently, the Punjab Government has provided the land in question to the appellant on lease to carry out seed multi plication programme. In fact, the annual report and accounts of the appellant company pertaining to the previous year relevant to the assessment year under consideration contain a proclamation of the progress in the diversification through contract farming carried out. It illustrates the new crops promoted and also the increase in the acre age of the crop so grown. By referring to the aforesaid, we are only trying to point out that the objective of the assessee in putting to use the land in question was for the furtherance of its objects of business. Thus the expenditure was revenue in nature. See Empire Jute Co. [1980 (5) TMI 1 - SUPREME Court ] and Alembic Chemical Works Co. Ltd.'s [1989 (3) TMI 5 - SUPREME Court ] cases - Decided in favour of assessee.
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