CHEMICOAT LTD Vs. INCOME TAX OFFICER
LAWS(IT)-1982-10-22
INCOME TAX APPELLATE TRIBUNAL
Decided on October 29,1982

Appellant
VERSUS
Respondents

JUDGEMENT

K.R. Dixit, Judicial Member - (1.) THE assessee is a manufacturer of metallic yarn and polyester films. For the accounting period it had incurred total expenditure of Rs. 29,200 in connection with a project for manufacturing metallic yarn and polyester films at Kandla. THE break up of these expenses is as follows : JUDGEMENT_340_TLIT0_19820.htm
(2.) The ITO found that no entry had been passed in the profit and loss account and at the time of hearing from the discussion it appeared to him that there was nothing like revenue expenses which could be allowed. The ITO did not accept the assessee's contention that the project was an extension of the existing business and ultimately rejected the claim of the assessee. The Commissioner (Appeals) held that all the expenses were for establishing a new project and not for the existing business of the assessee. He, therefore, confirmed the order of the ITO.
(3.) BEFORE us, the learned counsel for the assessee has drawn our attention to the objects clause of memorandum of association of the company and a letter dated 17-3-1978 from the Government of India. So far as the former is concerned, it is nobody's case that the company was doing anything outside the scope of its objects clause. The letter of 17-3-1978 is addressed to the assessee-company and there is no doubt that it was asses-see-company which was given permission for setting up the project at Kandla Free Trade Zone for the manufacture of 'metallic yarn and polyester films' for the purpose of manufacture of capacitors.;


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