1980 (4) TMI 57

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....V. RAMASWAMI J.-The following question has been referred at the instance of the revenue : " Whether it has been rightly held that project expenses incurred by the assessee were incidental to the carrying on of the assessee's business of managing agency and were not capital expenditure ? " The assessee is a private limited company and its main business is that of managing agency. They had als....

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....efore the Tribunal. It appears that the department even went to the extent of contending before the Tribunal that the promotion of newsprint paper mill was ultra vires the objects of the company. The Tribunal referred to the memorandum of the company and proceeded to consider the question on the basis that such promotional undertakings are within its objects. On the merits also, the Tribunal held ....

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....r otherwise turn to account the property and rights so acquired. (m) To sell, exchange, mortgage (with or without a power of sale), assign, lease, sublet and generally deal with the whole or any part of the business, estates, property or undertaking of the company as a going concern or otherwise to any person or persons, association or associations, or otherwise for such consideration as the co....

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....company had also been investigating several projects including projects for the manufacture of chemical plants, manufacture of asbestos sheets and pressure plants and newsprint paper mill projects. If the project materialised, the expenses were transferred and recovered from the new unit and the assessee secured the office of the managing agents or technical consultancy or the like and earned prof....