TMI Blog2008 (9) TMI 336X X X X Extracts X X X X X X X X Extracts X X X X ..... above mentioned facts and circumstances of the case, we set aside the impugned order and remit the matter to the High Court for fresh consideration in accordance with law - 5855 of 2008 - - - Dated:- 23-9-2008 - S. H. KAPADIA and B. SUDERSHAN REDDY JJ. M. L. Verma, Senior Advocate (Sujit Saurabh, Atischi Dipankar and Prasanna Baro, Advocates, with him) for the appellant. Mohan Parasaran, Additional Solicitor General (H. Raghavendra Rao and B.V. Balaram Das, Advocates, with him) for the respondent. ORDER 1. Leave granted. 2. The appellant is running a paper mill at Ahmedgarh in District Sangrur, Punjab. It is engaged in the business activity of manufacturing paper. 3. During the previous year relevant to the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e under the head 'building account', for the construction of drainage for disposal of effluents by treating the same as revenue expenditure, while ignoring the facts that the assessee had acquired an asset of enduring benefit in nature and enjoys exclusive rights for the usage of the same?" 5. The basic question which the High Court was required to answer was whether the assessee (appellant) had acquired assets of enduring benefit. This was the key question which is in-built in the question quoted hereinabove. For that purpose, the High Court was required to examine the terms and conditions on which the Forest Department had permitted the appellant to construct an open drain. The High Court was required to consider the effect of diversi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er perspective and for that purpose, we have given reasons to indicate the effect of forest diversion. After noticing the facts the High Court has to apply the tests laid down by the various judgments of this court. We do not wish to express any opinion on the merits of the case. 7. Suffice it to state that since the High Court has not formulated a correct substantial question of law and since the High Court is required to take into account all the above mentioned facts and circumstances of the case, we set aside the impugned order and remit the matter to the High Court for fresh consideration in accordance with law. 8. Accordingly, Income-tax Appeal No. 277 of 2004 shall stand restored to the file of the High Court and the matter i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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