TMI Blog2007 (4) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred to as "the Tribunal") Delhi Bench "C", in I. T. A. No. 4701/Del/1998 and I. T. A. No. 4795/Del/1998 for the assessment year 1995-96. 2 Brief facts of this case are that M/s. Relaxo Footwears Ltd. (for short "the assessee") is a company engaged in trading of all kinds of rubber footwears and in the year under consideration, the assessee had commenced the business of manufacture and sale of hawai chappals at its factory at Bahadurgarh. The assessee filed the return of income on November 30, 1995, disclosing total income of Rs. 1,50,98,660 and the same was processed under section 143(1)(a) of the Act. During the course of the assessment proceedings, the Assessing Officer noticed that the assessee has claimed pre-operative expenses o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which arises for consideration in the present case is as to whether the nature of expenses are revenue in nature, if they are incurred in respect of new unit which is the extension of old business. This aspect was considered by this court in CIT v. Modi Industries Ltd . (No. 3) [1993 200 ITR 341. In that case the assessee-company, which manufactured various commodities like sugar, vanaspati, soaps, paints and varnish, torch and lantern, started manufacturing a new commodity, viz., special alloy wire and billets. Debentures were issued for raising funds for this new steel unit and the assessee incurred expenditure for the issue of debentures. The question was whether the expenditure incurred by the assessee in the year in which the unit, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [1971 79 ITR 589 and the other cases referred to therein. In view of the above the only conclusion which can be arrived at, therefore, is that the Tribunal was justified in holding that the business of manufacture of special alloy wires and billets was an extension of the business and not a new business. The question referred is, therefore, answered in the affirmative and in favour of the assessee." 7. It is a matter of record that before the Tribunal, the senior Departmental representative did not controvert the claim of the assessee that there was complete unity of control and interlacing of the units. In the present case, the new unit was a part of the existing business and there is no dispute that there was unity of control and inte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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