2001 (3) TMI 270

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....mission made by the learned counsel for the assessee before us was that the fact that the assessee-company was incorporated in 1988 is not in dispute and the same has been accepted by the Department. The company that was incorporated in 1988 had several objects and also certain objects which were ancillary or incidental to the main object. The first of those objects was to discount bills, to advance money on security of goods lying with or under the control of the company, etc. The company for the various years from 1988 was carrying on the activity of discounting of bills and other consultancy and financial activities. In the previous year relevant to the asst. yr. 1994-95 the assessee proposed that it should diversify its activities and a....

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....ities have justifiably treated the entire expenditure as capital in nature. He referred to the decision of the Supreme Court in Godhra Electricity Co. Ltd. vs. CIT (1997) 139 CTR (SC) 564 : (1997) 225 ITR 746 (SC) for the proposition that income was rightly taxed. Our attention was also drawn to the decision of the Supreme Court in Tuticorin Alkali Chemicals and Fertilizers Ltd. vs. CIT (1997) 141 CTR (SC) 387 : (1997) 227 ITR 172 (SC) for the proposition that the interest income on investment of borrowed funds prior to commencement of business was taxable. Our attention was also drawn to another decision of the Supreme Court in CIT vs. Bokaro Steel Ltd. (1999) 151 CTR (SC) 276 : (1999) 236 ITR 315 (SC) for the proposition that till the set....