1994 (10) TMI 31

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....t of Rs. 82,283 paid on the borrowings of funds for constructing a factory for the manufacture of dye-stuffs was not a revenue expenditure ? " It appears from the materials on record that the assessee at the material time was a dealer in dyes. The assessee set up a factory for manufacturing dyes at different places. For the installation of the assets certain borrowings were made on which interest had been paid. The Income-tax Officer estimated the interest attributable to borrowings in installation of assets at Rs. 82,283 and disallowed the same treating the payment as of capital nature. Being aggrieved by this, an appeal was preferred before the Commissioner of Income-tax (Appeals) and reliance was placed on the decision of this court i....

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....lore made by the assessee to the Government of India on December 8, 1959, and in the application for licence submitted by the assessee to the Government, it was stated that the new unit at Bangalore was nothing but an expansion of the existing business. It was found in that case that there was complete inter-connection, interlacing and inter-dependence of both the units. This test has been laid down by determining whether two lines of business constitute the "same business" within the meaning of section 24(2) by the Supreme Court in the case of CIT v. Prithvi Insurance Co. Ltd. [1967] 63 ITR 632 and again approved by the Supreme Court in the case of Produce Exchange Corporation Ltd. v. CIT [1970] 77 ITR 739. By following the said principle,....