TMI Blog2010 (6) TMI 827X X X X Extracts X X X X X X X X Extracts X X X X ..... s incurred in the course of business activity carried on by the Assessee. ii) Whether the Tribunal was correct in holding that some of the expenses incurred for acquiring a capital asset was on revenue account. Despite there being no proof to substantiate such a claim and the conclusion being drawn on mere conjectures and surmised. 2. The facts leading to the filing of this appeal are that the respondent Assessee, for the assessment year 1998-99 sought deduction in respect of three items viz., (i) disallowance of prior period expenditure of ₹ 15,797/-, (ii) advances written of less than five years old ₹ 5,55,794/- and (iii) advances made for procuring capital goods written off ₹ 7,97,645/-. The assessing Officer whil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he nature of capital expenditure. But however the tribunal allowed the appeal of the Assessee and granted the said deduction which is not in accordance with the said provision. He further submits that the substantial question of law have to be answered in favour of the appellant by allowing the appeal. 5. Per contra learned counsel for the respondent assessee submitted that since the expenditure which was incurred in the instant case was not result in the capital asset coming into existence and it was only in the nature of advance payment the said deduction has to be granted under Section 37 of the Act. In support of his submission he has relied upon a decision of the Calcutta High Court reported in the case of Commissioner of Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... swering question No. 4. The Calcutta High Court was concerned with the question as to whether the advances made for the project expenditure in petro-chemical project was for a business purpose or not and while so answering held that the deletion in disallowance was not correct. 7. We find that since Section 37 does not incorporate such a condition and it expressly excludes all expenditure in the nature of capital expenditure, the contention raised by the learned for the respondent cannot be accepted and hence, the substantial questions of law raised in this appeal have to be answered in favour of the appellant. Accordingly the order of the tribunal is set aside by allowing this appeal and answering the questions of law in favour of the r ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
