1991 (12) TMI 21

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....he said expense incurred for research and development of the assessee's business and hence a revenue expenditure liable to deduction ? R. A. No. 178 : 1. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in holding that the research expenditure of Rs. 4,048 on phosphorous project cannot be considered to be revenue expenditure and, therefore, cannot be allowed as a deduction ? R. A. No. 179 1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the sum of Rs. 5,58,597 received by the assessee by way of refund of excess electricity duty accrued to the assessee as income on November 21, 1975, when the Supreme Court decided t....

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....since the money was spent for scientific research. That the assessee had raised such a contention before the assessing authority and the Appellate Assistant Commissioner is beyond dispute. On going through the order of the Tribunal, it can be inferred from the observations contained in the order that the assessee had raised such contention. We, in this connection, make a specific reference to the following sentences in paragraph 5 of the order : "... . . . All that section 35 envisages is the allowance of capital expenditure as a full deduction. . . . " Though such an observation has been made, the Tribunal does not appear to have dealt with the question as to whether the assessee is entitled to the benefit of section 35. Learned c....

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....has not been considered in the right perspective. On a perusal of the order of the Tribunal, it is clear that the Tribunal has not approached the issue taking into account the impact of section 41(1) on the facts of the case. We, therefore, are of the view that the entire issue requires reconsideration. Under the circumstances, we decline to answer this question. Coming to question No. (2) in R. A. No. 179 : The assessee has a case that, in any event, his claim is covered by the circular and instruction issued by the Central Board of Direct Taxes under section 119 of the Income-tax Act, 1961. The relevant Circular No. is No. 10/83/69 I. T. (A. II) dated September 28, 1970, and the Instruction No. is No. 1605 dated February 26, 1985. Whet....