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2022 (10) TMI 687 - HC - Income TaxNature of receipt - excess realization of levy price on sale of incentive sugar - revenue or capital receipt - expenses in connection with construction and handing over of transmission lines/substation to Karnataka Government was treated as revenue expenditure - Exclusion of incentive sugar from valuation of closing stock - whether Tribunal was right in excluding the incentive sugar from valuation of closing stock? - HELD THAT:- Question now been answered in the case of Additional Commissioner of Income-tax, Bareilly vs. Dhampur Sugar Mill (P.) Ltd. [2014 (11) TMI 356 - ALLAHABAD HIGH COURT] held that where an expenditure is made not only once and for all, but with a view to bringing into existence an asset or an advantage for the enduring benefit of a trade, there is very good reason, in the absence of special circumstances leading to an opposite conclusion, to treat it as an expenditure properly attributable not to revenue but to capital. If the advantage which had accrued to the assessee was to facilitate its trading operation or the conduct of its business while leaving the fixed capital untouched, the expenditure would be on the revenue account. Expenditure which was incurred by the assessee in the laying of transmission lines was clearly on the revenue account -CL. The expenditure which was incurred by the assessee was for facilitating the efficient conduct of its business since the assessee had to supply electricity to its sole consumer - This was not an advantage of a capital nature. The Tribunal was, in these circumstances, correct in affirming the view of the Commissioner (Appeals) - Decided in favour of assessee.
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