2016 (2) TMI 521

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....ibunal") in ITA No. 800/Chd/2012, for the assessment year 2009-10, claiming the following substantial question of law:- Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT was justified in upholding the decision of Ld. CIT(A) in deleting an addition of Rs. 81,90,000/- made by the Assessing Officer by treating the Land Development Expenditure as Capital in nature? 2. Briefly stated, the facts necessary for adjudication of the instant appeal as narrated therein may be noticed. The assessee- Corporation has been set up by the Punjab Government to carry on the business of land development, contract farming, procurement of foodgrains, marketing and export etc. The assessee filed the original ret....

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....y the revenue. 3. We have heard learned counsel for the revenue. 4. The primary issue that arises for consideration in this appeal is whether the expenditure incurred by the assessee for reclaiming and development of land was capital expenditure or revenue expenditure. 5. It was not disputed by the learned counsel for the revenue that the similar issue in the case of the assessee for the assessment year 2005-06 had come up for consideration before this Court in ITA No. 163 of 2009 (Commissioner of Income Tax-II, Chandigarh v. M/s Punjab Agro Foodgrains Corporation) decided on 18.9.2014, wherein under similar circumstances, the deduction was held to be admissible under Section 37 of the Act being revenue in nature. The relevant part....

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....f the general principles, which are followed in such cases." 11 to 13 XX XX XX 14. Examining the factual matrix in the present appeals, the Tribunal after examining the file noting of the Punjab Government dated 28.7.2005 which had been annexed to the assessment order recorded a clear finding that the land was lying fallow and was not barren though it was not being put to alternative use. The Tribunal on appreciation of evidence on record had come to the conclusion as under:- "7. A bare perusal of the above notings of the Punjab Government would show that the land leased to the appellant was not a barren land though it is said to be lying fallow and not being put to alternative use. The entire case of the CIT(A) i....