9911796707
TMI Blog2002 (6) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of cash compensatory support (CCS) was a revenue receipt and therefore exigible to tax? (iii) Whether, the expenditure of Rs. 22,000 incurred by way of fees to an advocate was allowable as revenue expenditure?" So far as the first question is concerned, it covers two items, namely, expenditure incurred on accident insurance and medical expenses in respect of the two managing directors of the company-whether the same was includible for the purpose of computing the disallowance under section 40A(5) of the Income-tax Act. This issue arose before this court in the case of Ambica Mills Ltd. v. CIT [1999] 235 ITR 264, wherein this court has taken the view that if the company had, by taking out a policy of insuring the directors against per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee and in favour of the Revenue so far as the reimbursement of the medical expenses is concerned. As far as the second question is concerned, the Tribunal has merely relied on the Full Bench decision of the Delhi Bench of the Tribunal and the said decision was reversed by the Delhi High Court in the case of Gedore Tools Pvt. Ltd. v. CIT [1999] 238 ITR 268 wherein the view was taken that cash compensatory support receipts received from the Government would be taxable receipts in the hands of the assessee and constitute profits and gains. The Rajasthan High Court has also taken the same view in the case of CIT v. Emery Stone Manufacturing Co. [1997] 225 ITR 480 wherein it is held that, "in respect of incentives received by export ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and the said finding was confirmed by the Commissioner (Appeals). The matter was taken to the Tribunal and it was contended before the Tribunal that the expenditure so incurred has no direct connection with the acquisition of the capital asset but it was in fact connected with the recovery of the amount which was blocked by way of advance for the purpose of capital asset and, therefore, an allowable expenditure. The Tribunal has accepted this contention urged on behalf of the assessee and held that the amount was incurred only for the purpose of recovery of the amount advanced for the acquisition of the capital asset. The Tribunal has further observed that the impugned asset is not acquired and, therefore, the transaction or the agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
