TMI Blog2015 (4) TMI 504X X X X Extracts X X X X X X X X Extracts X X X X ..... without revising the return of income. Following judgment of Nirma Ltd.[2014 (10) TMI 388 - GUJARAT HIGH COURT], We, therefore, answer question (B) in affirmative and in favour of the assessee and against the Revenue, holding that the Appellate Tribunal was right in law in holding that lease rent paid under an arrangement with Gujarat Lease and Financials Ltd. for imported machinery and equipments for establishing a new Soda Ash Plant by the assessee, manufacturing caustic soda, for the period the new plant had not commenced production, was revenue expenditure. Following judment of Gujarat Alkalies and Chemicals Ltd. [2008 (2) TMI 11 - SUPREME COURT OF INDIA], We, therefore, answer question (C) in affirmative and in favour of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the same, the Revenue approached the Tribunal by filing an appeal, wherein, the Tribunal passed the impugned order, as referred to in Para-1, herein above. Hence, the present appeal. 3. At the time of admission, this Court framed the following questions of law; (A) Whether on the facts and circumstances of the case, the Appellate Tribunal was right in law in confirming the order of the CIT(A) allowing the claim of ₹ 2,38,77,468/as revenue expenditure made for the first time in the course of assessment proceedings by filing a letter dated 01.02.1994 without revising the return of income? (B) Whether on the facts and circumstances of the case, the Appellate Tribunal was right in law in holding that lease rent paid under an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ategorically record that Explanation 2 to Section 43(6) of the Act will not apply in the case of the assessee. This is preceded by narration of facts and reasons as to why the said Explanation is not applicable. In the circumstances, the submission that there is no finding on merits by the Tribunal is without any substance. 6. Mr. Shah, therefore, submitted that the question (A) framed, herein, be answered in favour of the assessee. 7. Mr. Parikh, learned Advocate for the appellant-Revenue, is unable to controvert the same. In that view of the matter, we answer question (A) in affirmative and held that the Appellate Tribunal was right in law in confirming the order of the CIT(A) allowing the claim of ₹ 2,38,77,468/as revenue ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re would arise. However, when the authorities below found that it was an expansion of the existing business, applying the tests laid down by this Court in the case of Alembic Glass Industries Ltd. (supra) in view of the decision of the Supreme Court in the case of Deputy CIT v. Core Health Care Ltd. [2008] 298 ITR 194 (SC), the fact whether the borrowing is capital or revenue expenditure would be of no consequence. 9. Mr. Shah, further, invited our attention to a decision of this Court in Tax Appeal 25 of 2002 and the allied matters, wherein, this Court has also followed the decision in COMMISSIONER OF INCOME TAX VS. NIRMA LTD. (Supra). Mr. Shah, therefore, submitted that the question (B) be also answered in favour of the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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