COMMISSIONR OF INCOME TAX Vs. RELAXO FOOTWEARS LTD
HIGH COURT OF DELHI
COMMISSIONR OF INCOME TAX CENTRAL REVENUE BUILDING NEW DELHI
RELAXO FOOTWEARS LTD.
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V.B.GUPTA, J. -
(1.) This is an appeal under Section 260A of the Income Tax, 1961 (hereinafter referred to as 'Act') filed by Revenue challenging the order dated 11th August, 2006 passed by Income Tax Appellate Tribunal (hereinafter referred to as 'Tribunal') Delhi Bench 'C', in ITA No. 4701/Del/1998 and ITA No. 4795/Del/1998 for the assessment year 1995-96.
(2.) Brief facts of this case are that M/s. Relaxo Footwears Ltd. ( for short 'the Assessee') is a company engaged in trading of all kinds of rubber footwears and in the year under consideration, the Assessee had commenced the business of manufacture and sale of Hawai Chappals at its factory at Bahadurgarh. The Assessee filed the return of income on 30th November, 1995 disclosing total income of Rs.1,50,98,660/- and the same was processed under Section 143(1)(a) of the Act. During the course of assessment proceedings, the Assessing Officer noticed that Assessee has claimed pre-operative expenses of Rs.41,24,841/- in the computation of total income in respect of the expenses occurred on new factory and has also claimed capital issue expenses of Rs. 2,63,588/-. The Assessing Officer disallowed these claims of the Assessee by holding that pre-operative expenses cannot be written off in one go as done by the Assessee and the capital issue expenses are allowable only after the public issue has been raised and subscribed.
(3.) Being dissatisfied with the order passed by the Assessing Officer, the Assessee filed an appeal before Commissioner of Income Tax (Appeal) who partly allowed the appeal of the Assessee.;
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