Law:

Section:

Section 37(1) of the Income-tax Act, 1961 - Capital or revenue expenditure - Whether expenditure incurred by State Industrial Investment Development Corporation on preparation of project and feasibility reports was revenue expenditure - Held, yes Facts The assessee, a State Industrial & Investment Development Corporation, was engaged in the business of promoting and operating schemes for the industrial development of the State. In the course of its business activities the assessee got project reports and feasibility studies prepared by qualified persons and incurred expenditure over them. The ITO disallowed the aforesaid expenditure as capital expenditure. On appeal, the AAO as well as the Tribunal held that the impugned expenditure was revenue expenditure. On reference: Held Both the authorities, the AAC and the Tribunal, applying the correct legal principles for determining whether the expenditure incurred was capital expenditure or revenue expenditure, had concurrently found that the expenditure incurred by the assessee, with due regard to the nature of business, was revenue expenditure. In reaching its conclusions, the Tribunal had not misapplied the legal principles. Accordingly, the impugned expenditure was rightly held to be allowable as revenue expenditure. K. Srinivasan and H.R. Rao for the Applicant. G. Sarangan and J.N.S. Prasad for the Respondent. Order Puttaswamy, J.- In these references made under section 256 of the Income-tax Act, 1961, the Tribunal, Bangalore Bench, at the instance of the revenue has referred the following question of law for the assessment years 1970-71 to 1973-74 of one and the same assessee. "Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the expenditure incurred on preparation of the project and feasibility reports is revenue expenditure and not capital expenditure?" In order to appreciate the question referred to us, it is necessary to notice the facts as found by the Tribunal. 2. Karnataka State Industrial & Investment Development Corpn. Ltd. a wholly owned Government company of Government of Karnataka, is, inter alia, engaged in the business of promoting…

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