1984 (3) TMI 24

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....THA SHETTY J.-The Income-tax Appellate Tribunal, Bangalore Bench, has referred, under s. 256(1) of the I.T. Act, 1961, the following question of law for the opinion of this court : "Whether, on the facts and in the circumstances of the case, Rs. 11,270 being the expenditure incurred by the assessee by way of stamp, registration fee and legal expenses for the execution of registration of the lea....

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....76, the relevant previous year ending December 31, 1974. Thereunder, it had deducted the aforesaid sum of Rs. 11,270 by way of expenditure incurred. The ITO completed the assessment accepting the return giving the said deduction claimed. But the Commissioner initiated proceedings under s. 263 of the Act disallowing the expenditure of Rs. 11,270 on the ground that it was of capital nature having be....

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....which the assessee is to earn profit. This contention would have been relevant provided the assessee was engaged in a business prior to the execution of the lease deed and the expenditure incurred was incidental to such business. But the assessee herein, for the first time, entered into the business in respect of which he spent the amount for executing and registering the lease deed. But for the e....

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....he assessee. Similar was the distinguishing feature in the following two decisions of the Bombay High Court relied upon by the learned counsel : (i) CIT v. Hoechst Pharmaceuticals Ltd. [1978] 113 ITR 877 and (ii) CIT v. Bombay Cycle & Motor Agency Ltd. [1979] 118 ITR 42. In the instant case, as we have already stated, it was for the first time that the assessee entered into the business by e....