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2018 (9) TMI 75 - HC - Income TaxExpenditure incurred towards a new project which was abandoned subsequently - nature of expenditure - capital of revenue - allowable deduction - Held that:- The proper test to be applied is not the nature of new line of business, which was commenced by the assessee, but unity of control, management and common fund. In the instant case, we find that this issue was never disputed by the Assessing Officer or the CIT (A) or the Tribunal, as could be seen from the orders passed by the respective Authorities. The Authorities concurrently held that it is the assessee, who had commenced business and the assessee would mean the assessee company as a whole and not a different entity. Therefore, when there is commonality of control, management and fund, those would be the decisive factors to be taken into consideration and not the new line of business namely textile business. Having held so, it may not be necessary for this Court to dwell upon the facts, which have been identical in the decision in the case of Sakthi Sugars Ltd.[2010 (8) TMI 456 - MADRAS HIGH COURT], as, on facts, we are fully convinced that the decisive factors involved are unity of control, management and common fund. In the instant case, as admitted by the CIT (A), the preoperative expenses are all generally revenue expenditure and by applying a wrong test, which is not the decisive test, the Authorities had concurrently committed an error in treating the expenditure as capital expenditure. For all the above reasons, the order passed by the Tribunal calls for interference and the substantial question of law, which has been framed for consideration, has to be necessarily answered in favour of the assessee
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