TMI Blog2019 (4) TMI 972X X X X Extracts X X X X X X X X Extracts X X X X ..... ction of Mawa, which is also a milk product. Under such circumstances, tribunal correctly came to the conclusion that this is a case of expansion of existing business and not a case of setting up of new industry. The Supreme Court in case of Alembic Chemical Works Co. Ltd. Vs. Commissioner of Income Tax, Gujarat [ 1989 (3) TMI 5 - SUPREME COURT] was considering a case where the assessee was engaged in the business of manufacturing antibiotic including the Penicillin. The assessee acquired knowhow to produce higher yield and sub culture of high -yielding strain of penicillin. Observing that there was no evidence to indicate that this was not in the line of existing manufacture of Penicillin, the Court held that the expenditure was re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een claimed as revenue expenditure. This issue eventually reached the tribunal. The tribunal by the impugned judgment relied upon its earlier decision in case of assessee for the earlier assessment year and confirmed the view of CIT (Appeals) and dismissed the revenue's Appeal. Tribunal was of the opinion that there was interlacing of the accounts, management and control. The new product to be manufactured by the assessee, was in the same line of the business, in which the assessee was already engaged. The tribunal therefore held that the expenditure was incurred for expansion of the existing business and therefore allowable as a revenue expenditure. 3. Learned Counsel for the Revenue submitted that the assessee was previously engage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this Court in case of Commissioner of Income Tax Vs. Tata Chemicals Ltd. reported in (2002) 256 ITR 395, in somewhat similar background had held and observed as under; 9. As far as question (b) read with question (h) is concerned, Mr. Desai took us through the order passed by the Assessing Officer as well as by the Commissioner of Income Tax (Appeals), Mumbai, and pointed out that both these authorities have come to the conclusion that this fertilizer unit will have to be treated as a separate unit and, therefore, the benefit Under section 36(l)(iii) cannot be extended to the respondent as far as any amount of interest paid in respect of capital borrowed for the business of the fertilizer unit is concerned. Now, when one sees the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of business. The above propositions are culled out from the following judgments of the apex court: (1) Setabganj Sugar Mills Ltd. v. CIT[1961] 41 ITR 272 (SC); (2) CIT v. Prithvi Insurance Co. Ltd. [1967]63ITR632(SC); (3) Produce Exchange Corporation Ltd. v. CIT [1970]77ITR739(SC); (4) Standard Refinery and Distillery Ltd. v. CIT [1971]79ITR589(SC); (5) Hooghly Trust (Pvt.) Ltd. v. CIT [1969] 73ITR685(SC); and (6) B. R. Ltd. v. V. P. Gupta, CIT [1978]113ITR647(SC). The learned counsel appearing for the parties took us through the text of the various judgments referred to hereinabove and we are in complete agreement with the Tribunal that the above determined tests would be the correct approach to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id to be a question of law warranting adjudication by this court. In view of what is observed hereinabove, the questions of law raised in at (b) and (h) do not arise for our consideration. 7. The Supreme Court in case of Alembic Chemical Works Co. Ltd. Vs. Commissioner of Income Tax, Gujarat, reported in [1989] 177 ITR 377, was considering a case where the assessee was engaged in the business of manufacturing antibiotic including the Penicillin. The assessee acquired knowhow to produce higher yield and sub culture of high yielding strain of penicillin. Observing that there was no evidence to indicate that this was not in the line of existing manufacture of Penicillin, the Court held that the expenditure was revenue in nature. 8. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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