1989 (2) TMI 107

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....TAL J. -The assessee was doing business and was running concern. In the accounting year relevant to the assessment year 1977-78, it purchased a plot of land to raise a building for business purposes. In the previous year, it had to pay Rs. 1,890 as municipal taxes on the purchased plot and claimed deduction under section 37 of the Incometax Act, 1961 (for short "the Act"), during the assessment fo....

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....ces of the case, the Income-tax Appellate Tribunal has erred in law in holding that municipal tax of Rs. 1,890 paid in respect of Dev Nagar Plot is business expenditure ?" There is no dispute that if a new business is set up for the first time, the expenditure in doing so would be of capital nature and deduction would not be permissible under section 37 of the Act, but if by a running concern t....