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2008 (8) TMI 316 - SC - Income TaxCapital Expenditure versus Revenue Expenditure – AO observed that in view of the past history of the case, the expenditure towards development and prospecting charges amounting to Rs.1460729/- is treated as of capital nature and disallowed – tribunal upheld that disallowance as prospecting expenses were included on expenditure of corporate plan which does not pertain to prospecting expenses. High dismissed the petition on the ground of substantial question of law. Assessee contended that this expenditure was incurred for orientation of the administrative set up and this was in the nature of revenue receipt – SC held that impugned judgment proceeded to invoke the provisions of Section 37(1) of the Income Tax Act. Had the High Court considered the claim of the appellant in the light of Section 35E(2), it might have arrived at a different conclusion. Matter remanded to HC for reconsideration.
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