1979 (8) TMI 5

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....., to the assessee and, as such, depreciation and development rebate are admissible with reference to this amount also ? 2. Whether the expenses of Rs. 23,399 incurred on foreign tours of technical officers of the company represent an element of actual cost of machinery and plant to the assessee and, as such, depreciation and development rebate are admissible with reference to this amount also ? 3. Whether, on the facts and in the circumstances of the case, the expenditure incurred by the assessee in organising football tournament was an allowable deduction u/s. 37 of the Income-tax Act, 1961 ? " The respondent-company in its assessment year 1962-63 claimed an item of Rs. 1,05,227 as expenses incurred by its directors and other off....

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.... if admissible in that year. The Tribunal agreed that this amount was to be capitalised because it was an integral part of the machinery. There was another item of Rs.15,102 in holding D.C.M. Football tournament. The ITO disallowed the same but the AAC deleted the disallowance. The Tribunal upheld the allowance of expenditure. It is thereafter that the Revenue asked the Tribunal to refer the various questions of law out of which the above said three questions have been referred to this court. In CIT v. L. G. Balakrishnan and Bros. (P.) Lid. [1974] 95 ITR 284, at 297 (Mad), the expenses incurred on foreign trips by the directors and engineers as are relatable to the project have been held to be considered as part of the actual cost ....

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....s to what amount is to be included in the actual cost will have to be determined by the ITO. Of course, the actual, amount which is so found and will be that as is relatable to the cost of the project. The question has to be answered in the affirmative. Question No. 2.-This question is also on the same basis as question No. 1 and must also be answered in the affirmative. Question No. 3.-Similar question with respect to the assessee was the subject-matter of decision in CIT v. Delhi Cloth and General Mills Co. Ltd. (I.T.R. No. 172/74, decided on 19-4-1978-[1978] 115 ITR 659), by this court. The Division Bench has held that the expenditure incurred by the assessee in organising the tournament was an allowable deduction under s. 10(2)(xv....