1989 (7) TMI 41

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....reinafter called "the Act"). The Income-tax Officer did not allow the deduction on the reasoning that these items were not being used for packing the material and considered the expenditure to be of capital nature. On appeal, the Commissioner of Income-tax (Appeals) came to the conclusion that depreciation on the purchase cost to the extent of 10% was allowable. On further appeal, the Income-tax Appellate Tribunal, Chandigarh, agreed with the view taken by the Income-tax Officer but upheld the order of the Commissioner of Income-tax (Appeals) allowing depreciation as no appeal against it was filed by the Revenue. This has necessitated the Tribunal to refer the following question for the opinion of this court: "Whether, on the facts and i....

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....ement Companies Ltd. [1988] 172 ITR 257 has held that for carrying business activity in a profitable way and advantageous to the assessee, if any expenditure is incurred for the construction of water pipe lines and high tension electricity supply lines or construction of roads by the assessee on Government or, municipal land, such an expenditure is allowable as revenue expenditure. We are of the opinion that the expenditure incurred on the purchase of tarpaulins and polythene covers to save the very existence of the foodgrains, which is the main business of the assessee, from rain, dust, storm, sun, etc., would certainly be a revenue expenditure. Whether an expenditure is of revenue or capital nature, various tests have to be kept in min....