COMMISSIONER OF INCOME TAX DELHI CENTRAL Vs. USHA IRON AND FERRO METAL CORPORATION LTD
LAWS(DLH)-2007-5-220
HIGH COURT OF DELHI
Decided on May 23,2007

COMMISSIONER OF INCOME TAX DELHI (CENTRAL) - II ARA CENTRE, E-2 JHANDEWALAN EXTN. NEW DELHI Appellant
VERSUS
USHA IRON AND FERRO METAL CORPORATION LTD. Respondents

JUDGEMENT

MADAN B.LOKUR, J. - (1.) The Revenue is aggrieved by an order dated 16th June, 2006 passed by the Income Tax Appellate Tribunal, Delhi Bench 'A' in ITA No.915/Del/1999, ITA No. 2389/Del/2000 and ITA No.4366/Del/2004 relevant for the assessment years 1995-96 to 1997-98.
(2.) The Assessee carries on the business of manufacturing and production of CTD bars as also different types of iron rods. The Assessee used to procure the raw material, that is, billets from the open market. The Assessee decided to manufacture the raw material on its own and for this purpose it set up a Steel Melting Shop. In the course of setting up the Steel Melting Shop, the Assessee incurred substantial expenditure and this was shown by the Assessee in its books as capital expenditure incurred. The Assessee also filed its returns on this basis.
(3.) Later the Assessee filed revised returns wherein it claimed that the expenditure was revenue expenditure having been incurred for the expansion of its business. On this basis, the Assessee claimed a deduction. The Assessing Officer did not accept the view canvassed by the Assessee primarily on the ground that the Assessee had shown the expenditure as being of a capital nature in its own books.;


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