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2008 (2) TMI 421 - HC - Income TaxAmortization of Preliminary expenses – Business Expenses –Allowance – Remission or cessation of liability – deduction on actual payment basis – held that - the debenture issue expenditure in question is for the purposes of working capital in course of modernisation of the existing plant and machinery. Therefore, this is not a case which can fall within section 35D(1)(i) of the Act - the assessee will not be entitled to any deduction unless the assessee can establish that the advertisement or publicity was being done outside India for and on behalf of the assessee and in respect of goods the assessee deals in or provides in the course of his business u/s 35B - Mere withdrawal of the court cases and submitting the disputes to arbitration would, in no case, amount to cessation of liability, which is the pre-requisite condition, for applying the provisions of section 41 of the Act. The Tribunal has rightly come to the conclusion that in the absence of cessation of liability section 41 of the Act cannot be made applicable
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