Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2015 (3) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (3) TMI 849 - HC - Income TaxExpenditure incurred for preparation of the feasibility study report and capital-work-in-progress disallowed - disallowing the expenditure by ITAT in the earlier years, but written off during the previous year corresponding to the assessment year 2002-03 since the proposed project was abandoned - Held that:- The expenditure made for construction/acquisition of new facility subsequently abandoned at the work-inprogress stage was allowable as incurred wholly or exclusively for the purpose of assessee’s business as covered by the decision in Graphite India Ltd. (1996 (6) TMI 73 - CALCUTTA High Court). Our conclusion is fortified by the view expressed by the Supreme Court in CIT Vs. Indian Mica Supply Co. P. Ltd. [1970 (4) TMI 6 - SUPREME Court] wherein held that it was only as a result of the compromise that the respondent became entitled to remain in possession of the demised land. Its liability also became ascertained only at that point of time. It cannot be disputed that the respondent in incurring the expenditure had acted in the interest of and for the purpose of its business. The expenditure was not laid out for any purpose other than that of carrying on the business. The deduction was properly admissible under section 10 (2)(xv) of the Act. Section 10 (2) (xv) of the old Act corresponds to section 37 (1) of the present Act. For the aforesaid reasons the question is answered in the affirmative - decided in favour of the assessee.
|