TMI Blog2006 (2) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal. Hence, no substantial question of law arises for consideration of this court - - - - - Dated:- 7-2-2006 - Judge(s) : P. D. DINAKARAN., P. P. S. JANARTHANA RAJA. JUDGMENT The judgment of the court was delivered by P.P.S. Janarthana Raja J.- The appeal is filed by the Revenue under section 260A of the Income-tax Act, 1961 against the order of the Income-tax Appellate Tribunal in I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 143(2), the assessment was completed under section 143(3). While completing the assessment, the Assessing Officer disallowed the claim of expenditure to the extent of Rs. 20,36,157 towards crop development expenses on the ground that the same was not considered as a revenue expenditure by the assessee in its accounts. However, the assessee claimed it as revenue in the statement of computati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period. Therefore, it had to ensure continuous availability of raw materials. Keeping that objective in mind, the assessee-company propagated a new crop among the local farmers for which it had incurred various expenses totalling to Rs. 20,36,157. All these expenses were by and large educative and advertisement in nature and that the participation of the farmers was ensured in developing the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded to be treated as capital expenditure ineligible for deduction. In respect of the project launching expenses amounting to Rs. 16,41,125 also, we find that the assessee had spent the money mainly for advertisement through visual and print media and also for designing and printing leaflets, brochures, etc., and hence these expenses were also in the nature of business expenditure entitled for de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for the purpose of income-tax. The purpose of the Companies Act is different from the purpose of the Income-tax Act. Therefore, the classification of those expenses as capital in nature for the purpose of the Companies Act, does not ipso facto make that expenditure a capital expenditure for the purpose of the Income-tax Act. So, we are of the view that the crop development expenses and new proje ..... X X X X Extracts X X X X X X X X Extracts X X X X
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