1981 (1) TMI 123

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....s lamination expenses. The ITO found that these expenses were incurred to set up a plant for manufacture of laminating bags and the assessee obtained a project feasibility report for the said plant for which Rs. 15,000 had been incurred. Another amount of Rs. 12,000 was incurred to give commission to First National City Bank, for issuing cash credit in favour of import of machinery from Italy. The....

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.... was set up. He therefore held it to be a capital expenditure. The CIT (A) held that where new business was going to be established it was to be treated as capital expenditure and relied on the decision of the Allahabad High Court in the case of Modi Industries Ltd. (1977) 110 ITR 855 (All). The CIT (A) further held that the obtaining of the feasibility report and the assessee's importing of subst....

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....ty already carried on by the assessee or a completely new activity. The ld. counsel has, however, expressed his inability to produce the above report. The details regarding the guarantee commission agreement have also not been filed. From the facts on record it appears that the assessee was going to establish a new line of manufacturing activity and he has not been able to establish that it was a ....