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of <h1>Court denies deduction for Nagarjuna Project expenses but allows deduction under Section 35D for project development payments.</h1> <h3>Zuari Agro Chemicals Ltd. Versus The Commissioner of Income Tax</h3> The court ruled in favor of the Respondent-revenue, denying the deduction for expenses related to the Nagarjuna Project. However, the court ruled in favor ... Expenses on travelling and retainer fees paid - Held that:- Mr. Toor, the learned counsel for the applicant-assessee very fairly states that the issue arising herein stands concluded against the applicant-assessee and in favour of the Respondent-Revenue by the decision of this Court in Commissioner of Income Tax v/s. J. K. Chemicals Ltd. [1992 (10) TMI 18 - BOMBAY High Court] and Larsen & Toubro Ltd. v/s. Commissioner of Income Tax ( 2012 (9) TMI 660 - BOMBAY HIGH COURT ). Eligibility for relief under Section 35D - the payment made after 31st March, 1970 to its promoters - Held that:- As decided in favour of assessee relying on own case for A.Y. 1975-76 [2012 (3) TMI 545 - BOMBAY HIGH COURT] Issues:1. Whether expenses on travelling and retainer fees for a project are revenue in character and deductible.2. Whether an amount paid to promoters for project development is eligible for relief under Section 35D.Analysis:1. Regarding Question no.(i):- The applicant-assessee's counsel concedes that the issue is settled against the assessee by previous court decisions.- Citing precedents, the court rules in favor of the Respondent-revenue, denying the deduction for expenses related to the Nagarjuna Project.2. Regarding Question no.(ii):- The applicant-assessee claimed a deduction under Section 35D for payments made to promoters post 31st March, 1970, for project development expenses incurred earlier.- The Assessing Officer and higher authorities disallowed the claim, stating the expenditure was incurred before the specified date.- The Tribunal's decision was based on similar rulings for previous assessment years.- The applicant's counsel presents a favorable precedent from a previous case for the same issue.- The court, following the precedent, rules in favor of the applicant-assessee, allowing the deduction under Section 35D.The judgment concludes by disposing of the reference, with no order as to costs.
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