TaxTMI 
TaxTMI 
2016 (1) TMI 1488
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....enses on induction of 2 New HP Dumpers & 1 Excavator CK-300 before the starting of working at mines. Besides as Labour Welfare measures organized function to honour some of the best workers which was followed by lunch, pooja and Momento at our Shiv Mandir of Laxmipura Mines. Light Decoration charges on the occasion of Baba Ramdev Mela on Temple situated at our Satalkheri Mining area as requested by the SC/ST workers. These expenditures being incidental to business and in the nature of labour welfare was allowable. The necessary vouchers with supporting documents already submitted to Assessing Authority during the course of Assessment proceedings. 2.1 Lower authorities erred in disallowing by holding that they were not incidental for business. 2.2 Reliance is placed on the judgments CIT v/s. Mohan Meakin Ltd. - [(2010) 189 Taxman 377 (Delhi)] , CIT v/s. Aruna Sugars Ltd. - [(1981) 132 ITR 718 (Mad)], Jt. CIT v/s. Pankaj Oxygen Ltd. - [(2003) 78 TTJ (Nag) 119], I.C.B. Ltd. v/s. I.T.O. - [(2005) 93 ITD 418 (Mum)], Vijay Seeds Co. (P) Ltd. v/s. Asstt. CIT - [(2001) 79 ITD 233 (Pune)] In all these cases expenditure incurred in Puja, Hawan, Kirtan and labour welfare was allowed as bus....
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....penditure. 2. [(1971) 81 ITR 754 (SC)] - Dalmia Jain & Co. Ltd. v/s. CIT - Held - If expenditure is incurred to protect the business of the assessee, to defend a claim made against it, then such expenditure must be considered as revenue expenses. 3. [(1980) 124 ITR 1 (SC)] - Empire Jute Co. Ltd. v/s CIT - Held - Expenditure incurred for preserving and maintaining or protecting capital asset is revenue expenditure. 4. [(1990) 187 ITR 39 (SC)] - Bikaner Gypsums ltd. v/s. CIT - Held - Where the assessee has an existing right to carry on the business, any expenditure made by it during the course of business for the purpose of removing any restriction / obstruction or disability would be on revenue account, provided the expenditure does not acquire any capital asset. - Revenue Expenditure. 5. [(1994) 210 ITR 222 (Cal)] - CIT v/s Auto Distributors Ltd - Payment made to obtain vacant possession of a building was not capital expenditure but was incurred wholly and exclusively in the course of business and allowable as such. 6. [(1978) 114 ITR 434 (Cal)] - CIT v/s Deluxe Film Distributors Ltd. - Held - Amount paid for clearing title in the course of carrying on of business is for ....
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....in exigencies this project could not be started as the coal block was ultimately allotted to some other party, thus the reasons for non start of new power project were beyond the control of assessee. Assessee paid Rs.741144/- during the year 2007-08 as a contractual obligation to M/s Development Consultants Private Ltd, Consulting Engineers, Kolkata, for such preparation of Detailed Project Report (DPR) for 600 MW Coal based Power Plant in Raigarh District, Chhattisgarh and debited the same as revenue expenditure under the head of Legal and Professional Expenses at Mumbai. In business realities in expansion of business various proposals are explored and expenditure is incurred on feasibility and other aspects. Due to unforeseen circumstances and non feasibility some of the proposals are dropped for one or another reason. As per settled law if assessee succeeds in commencing new project then such expenditure will be treated as pre-operative expenditure, however if any project is not commenced it is to be allowed as revenue expenditure. In the given facts and circumstances, which are not disputed the legal and professional expenses incurred for exploring new business intrinsically li....
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....st was allowed. 6. Kalyani Steel Ltd. v/s. Dy. CIT [1997] 62 ITD 233 (Pune) - held - Where asessee engaged in production of steel had undertaken a new project of seamless tubes and it was found that assessee's steel business and tube business constituted same business interest on borrowed capital claimed as pre - operative expenses relating to tube business was allowable u/s. 36 (1) (iii). 7. Tata Chemicals v/s. Dy. CIT [2000] 72 ITD 1 (Mum) - held - In order to decide whether two businesses are a single, composite or same business the decisive test is unity of control. 8. Grasim Industries Ltd. v/s. Dy. CIT [1999] 64 TTJ (Mum) 357 - held - Where all existing units of assessee were found to constitute same business assessee would be allowed deduction of interest even though such unit had not commenced production. It is contended by ld. Counsel that in view of above factual and legal contentions, judicial precedent all the above expenditure being revenue in nature and incurred wholly and exclusively for business purpose shall be allowed to assessee. 6.1 Ld. DR supported the order of lower authorities. 7.1 We have heard the rival contentions and perused the material availabl....