Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2019 (4) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (4) TMI 972 - HC - Income TaxAllowable expenditure u/s 37 - preoperative expensive for “Mawa Project” - expansion of existing business OR case of setting up of new industry - Whether a new project unconnected with the existing business which was capital in nature and not deductable u/s 37(1)? - HELD THAT:- The assessee-company was set up with the objects to produce or caused to be produced by process, grate, pack, store and sell milk products and icecream. In furtherance of such objects, the assessee had already set up an icecream producing unit. Using same management, control and accounts, the assessee attempted to set up another unit for production of Mawa, which is also a milk product. Under such circumstances, tribunal correctly came to the conclusion that this is a case of expansion of existing business and not a case of setting up of new industry. The Supreme Court in case of Alembic Chemical Works Co. Ltd. Vs. Commissioner of IncomeTax, Gujarat [1989 (3) TMI 5 - SUPREME COURT] was considering a case where the assessee was engaged in the business of manufacturing antibiotic including the Penicillin. The assessee acquired knowhow to produce higher yield and subculture of high-yielding strain of penicillin. Observing that there was no evidence to indicate that this was not in the line of existing manufacture of Penicillin, the Court held that the expenditure was revenue in nature. - Decided against revenue
|