2008 (1) TMI 261

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....orge for the Respondent. JUDGMENT The judgment of the court was delivered by C. N. RAMACHANDRAN NAIR J.—1. This appeal is filed under section 260A of the Income-tax Act, 1961, against the order of the Appellate Tribunal confirming the disallowance of preliminary expenditure incurred by the assessee for the construction of a shopping complex. The appellant-assessee was originally engaged....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....nt was later rectified under section 154 and disallowance was made on the ground that the expenditure claimed was capital in nature. The assessee carried the matter in appeal before the Commissioner of Income-tax who rejected the claim. The result of the second appeal filed before the Tribunal was also not different. 2. The questions raised. as substantial questions of law in this appeal are wh....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....counsel also relied on the decision of the Bombay High Court in Trade Wings Ltd. v. CIT [1990] 185 ITR 267 and that of the Gujarat High Court in Saurashtra Cement and Chemical Industries Ltd. v. CIT [1992] 196 ITR 237. 4. The first question to be considered is whether the issue raised is a debatable one barring rectification under section 154 of the Income-tax Act. In order to consider whether ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....expenditure as it goes to add to the capital of the project. We do not think that the two opinions are possible on this. Obviously, the expenditure which is in the form of preliminary expenditure for construction of a shopping complex is capital in nature and cannot be treated as revenue expenditure by any stretch of imagination. Therefore, rectification carried out under section 154 of the Income....