COMMISSIONER OF INCOME TAX Vs. HOOGLY MILLS CO LTD
LAWS(SC)-2006-11-189
SUPREME COURT OF INDIA
Decided on November 26,2006

COMMISSIONER OF INCOME TAX Appellant
VERSUS
HOOGLY MILLS CO. LTD. Respondents




JUDGEMENT

- (1.)Leave granted.
(2.)This appeal by special leave has been filed against the impugned judgment of the Calcutta High Court dated 26.6.2003 in ITA No.404 of 2000.
(3.)Heard the learned counsel for the parties and perused the record.
The respondent M/s. Hooghly Mills Co. Ltd. had by an agreement dated 24.3.1988 with the vendor, purchased an Undertaking and by the same agreement had also taken over the accrued and future gratuity liability of the vendor, which amounted to Rs.3.5 crores. The respondent assessee claimed that since this amount of Rs.3.5 crores towards gratuity is capital expenditure hence it is entitled to depreciation on the sum under Section 32 of the Income Tax Act, 1961.

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