Law:

Section:

Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of - Assessment year 1991-92 - Assessee-firm had taken a quarry on lease for a period of ten years for excavation of granites - Whether proportionate lease rent paid by assessee was a capital expenditure - Held, yes FACTS The assessee-firm was carrying on the business of cutting, polishing and exporting granites. The assessee had taken a quarry on lease for a period of ten years for extraction of granites and claimed the proportionate lease rent paid by it as revenue expenditure. The Assessing Officer, however, treated such expenditure as capital expenditure. On appeal, the Commissioner (Appeals) was of the view that since no enduring asset had been obtained, the proportionate rent for the period in question was to be considered as revenue expenditure. On revenue's appeal, the Tribunal while setting aside the order of Commissioner (Appeals) upheld the order of Assessing Officer. On appeal to the High Court : HELD In view of the decision of the Supreme Court in Aditya Minerals (P.) Ltd. v. CIT [1999] 239 ITR 817, on the facts and circumstances of the instant case, the Tribunal was right in holding that the quarry lease rent paid to the Government for acquiring the right to excavate the granite on lease was a capital expenditure. Note : The case was decided in favour of the revenue. CASE REVIEW Aditya Minerals (P.) Ltd. v. CIT[1999] 239 ITR 817 (SC)followed & relied upon. CASES REFERRED TO Aditya Minerals (P.) Ltd. v. CIT [1999] 239 ITR 817 (SC), Gotan Line Syndicate v. CIT [1966] 59 ITR 718 (SC) and Pingle Industries Ltd. v. CIT [1960] 40 ITR 67 (SC). Philip George for the Appellant. J. Naresh Kumar for the Respondent. JUDGMENT P.K. Misra, J. -The following questions of law arise for determination : "1. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in holding that The quarry lease rent paid to the Government for acquiring the right to excavate the granite on lease for ten years is capital expenditure ? 2. Whether, on the facts and in the circumstances of me case, the Income-tax Appellate Tribunal was right in law in…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492