K.S.JHAVERI, J. - (1.) In all these appeals identical questions of law and facts arise therefore they are decided by the common judgment.
(2.) By way of these appeals, the appellant-department has challenged the judgment of the Tribunal whereby the Tribunal has dismissed the appeal of the Department and also cross-objections of the assessee.
(3.) While admitting the appeals, this Court framed the following substantial question of law: Appeal No. 138/2008 "(i) Whether the ITAT was right and justified in treating the payment of interest of Rs. 3,10,13,781/- as revenue expenditure even when the capital borrowed was used for purchase of capital assets? (ii) Whether the ITAT was justified in holding that Explanation 1 to Section 41(1) of the Act was retrospective in nature and thus, was applicable to the present assessment year? (iii) Whether the ITAT was right and justified in treating the payment of expenses amounting to Rs. 4,50,84,615/- as revenue expenditure even when the same were capitalized and entered as pre-operative expenses by the assessee itself in its books of accounts? (iv) Whether the ITAT was justified in deleting the addition of Rs. 16,00,000/-, being liability in respect of leave and licence fees payable to Kanoria Industries Ltd. written back by the assessee, inspite of the specific provisions of Section 41(1) and its Explanations? (v) Whether the ITAT was justified in allowing the expenses of Rs. 50,000/-, as Labour Welfare expenses even when the assessee has failed to show that the said amount was wholly and exclusively utilized for business purposes? (iv) Whether the ITAT was justified in deleting the disallowance of Rs. 43,032/-, being ? ...?th of depreciation on vehicle, disallowed on account of personal use, even when no justification was provided by the assessee?" Appeal No. 129/2008 "(i) Whether the ITAT was right and justified in treating the payment of interest of Rs. 1,50,37,292/-, as revenue expenditure even when the capital borrowed was used for purpose of capital assets? (ii) Whether the ITAT was justified in deleting the addition of Rs. 24,53,779/- being liability in respect of leave and licence fees payable to Kanoria Industries Ltd. Written back by the assessee, inspite of the specific provisions of Section 41(1) and its Explanations? (iii) Whether the ITAT was right and justified in treating the payment of upfront fees to IDBI of Rs. 5,51,250/- as revenue expenditure even when the capital borrowed was used for purchase of capital assets?" Appeal No. 137/2008 "(i) Whether the ITAT was right and justified in holding the amount of Rs. 24,72,912/-, being incentive received on sugar quota allocated for free sale, as capital receipt ignoring the fact that receipt earned during business operations through higher price sale can only be termed as revenue receipt" (ii) Whether the ITAT was justified in deleting the addition of Rs. 1,27,76,000/- and Rs. 2,28,08,000/-, being liabilities in respect of interest on sugar and cane price difference respectively, written back by the assessee inspite of the specific provisions of Section 41(1) and its Explanations?" Appeal No. 91/2008 "(i) Whether the ITAT was right and justified in treating the payment of interest of Rs. 22,53,267/- as revenue expenditure even when the capital borrowed was used for purpose of capital assets? (ii) Whether the ITAT was right and justified in treating the payment of Rs. 2,71,87,089/- as revenue expenditure?" These questions if taken in tabular form reads as under: JUDGEMENT_321_LAWS(RAJ)5_2017_1.html;