Tribunal rules in favor of assessee on revenue expenditure & extra shift allowance

The Tribunal ruled in favor of the assessee regarding the allowability of expenditure for a paper project in Saharanpur as revenue expenditure. The expenditure was considered revenue in nature as no enduring benefit was acquired and the plant was not set up. Additionally, the grant of extra shift allowance on the cost of electric installations was decided in favor of the assessee based on a previous judgment, resulting in a favorable outcome for the assessee in both issues.

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Issues involved:
1. Allowability of expenditure for a paper project in Saharanpur as revenue expenditure.
2. Grant of extra shift allowance on the cost of electric installations.

Issue 1: Allowability of expenditure for a paper project in Saharanpur as revenue expenditure:
The assessee spent &8377;63,291 to explore the possibility of setting up a paper project in Saharanpur. The Assessing Officer disallowed the expense, stating it should be capitalized. However, the CIT(A) allowed it as revenue expenditure, citing past instances and the company's objectives. The Tribunal upheld this decision, noting that no enduring benefit was acquired, and the plant was not set up. The Tribunal's view was deemed correct, and the expenditure was considered revenue in nature, leading to a ruling in favor of the assessee.

Issue 2: Grant of extra shift allowance on the cost of electric installations:
The issue was found to be covered by a previous judgment in CIT v. Mahavir Spinning Mills Ltd. Following the reasoning in the mentioned case, the question was answered against the revenue and in favor of the assessee. The reference was disposed of accordingly.

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