Assistant Commissioner Of Income-Tax vs O.P. Gupta on 31 December, 1999
and CIT v. Ashok Cement Ltd. She also relied on the decision in Jagdish Prasad v. CIT[1976] 104 ITR 214 (All.)
Search Results Page
Search Results
1 - 3 of 3 (0.26 seconds)Gujarat Ambuja Cements Ltd vs Asstt. Cit, Inv. Circle (3)1 on 3 June, 2005
However, all the revenue expenditure incurred in pre-operative/pre-production period need to be capitalised as held in Madras Fertilisers Ltd. v. CIT (1994) 209 ITR 174 (Mad), CIT v. Madras Fertilisers Ltd. (1999) 238 ITR 672 (Mad), CIT v. Ashoka Cements Ltd. (1990) 186 ITR 443 (Cal) and also in Challapalli Sugars Ltd. v. CIT (1975) 98 ITR 167(SC) that pre-operative expenses can be capitalised. The question now arises is as to whether the assessee is entitled for any depreciation on such capitalised expenditure as claimed by him. In above referred cases, it has also been held that the assessee is entitled for depreciation on such pre-operative expenses capitalised. Respectfully, following the above decisions, we direct the assessing officer to allowed preciation to the assessee on this capitalised pre-operative expenses. We find that the assessee received some refund of Rs. 1,52,726.75 from GEB vide ref. No. OM/Com/F.P.... 17W/637/5833, dated 26-9-1990. The amount paid to GEB is Rs. 99,00,000, which should be capitalised and depreciation be allowed thereon this year.
Income-Tax Officer vs East Coast Flour Mills Ltd. on 21 April, 1982
Ltd. [1980] 125 ITR 618, of the Andhra Pradesh High Court in the case of Nagi Reddy & Co. (supra) and of the Supreme Court in the cases of Kedarnath Jute Mfg. Co. Ltd. v. CIR [l978] 82 ITR 363, and Sinclair Murray (supra) agreed with the assessee that the amounts in question could not be included as income in the assessee's hands till adjudication over the liability to pay sales tax was finally disposed of. The Commissioner (Appeals) took note of the fact that the ITO himself stated that the assessee was under an obligation to refund those collections to the clients in case it was finally held that the transactions in question were not liable to sales tax because the assessee had treated these collections only as in the nature of a deposit by the clients. The Commissioner (Appeals) further pointed out that if that were so, side by side with the extinguishment of the liability to sales tax, would arise a liability to refund the amount to the clients and consequently, in accordance with the mercantile system of accounting, the liability to an external source in respect of that amount was there. The Commissioner (Appeals) further observed that the treatment of the collections as trading receipts would be justified on the principles of the Supreme Court decisions referred to earlier.
1