Delhi H.C : Whether, on the facts and in the circumstances of the case, the difference in exchange amounting to Rs. 2,75,533 resulted in capital expenditure under s. 43A of the IT Act, 1961 and/or is not an allowable revenue expenditure under s. 28 r/w s. 37 of the Act?

High Court Of Delhi

Jain Tube Co. Ltd. vs. CIT

Sections 28(iiia), 37(1), 43A

Arijit Pasayat, C.J. & D.K. Jain, J.

IT Ref. No. 183 of 1983

27th July, 2001

Counsel Appeared

None, for the Petitioner : R.C. Pandey & Ajay Jha, for the Respondent

JUDGMENT

ARIJIT PASAYAT, C.J.:

On being moved for reference, the Tribunal, Delhi Bench ‘C’, has referred, at the instance of the assessee, the following questions under s. 256(1) of the IT Act, 1961 (‘the Act’) for opinion of this Court:

“1. Whether, on the facts and in the circumstances of the case, the difference in exchange amounting to Rs. 2,75,533 resulted in capital expenditure under s. 43A of the IT Act, 1961 and/or is not an allowable revenue expenditure under s. 28 r/w s. 37 of the Act?

2. Whether, on the facts and in the circumstances of the case, the receipt in respect of the sale of import entitlements amounting to Rs. 7,38,634 constitutes the business income of the assessee assessable under the IT Act, 1961?”

2. The factual aspects need not be gone into as the issue involved in the first question stands settled by a decision of the apex Court in Sutlej Cotton Mills Ltd. vs. CIT 1978 CTR (SC) 155 : (1979) 116 ITR 1 (SC). Following the view expressed in the said decision, we answer the question in the affirmative, in favour of the Revenue and against the assessee. So far as the second question is concerned, though the Tribunal referred to various decisions, it is not necessary to go into that in view of the provision contained in s. 28(iii)(a) of the Act, which was made operative w.e.f. 1st April, 1962. The question is answered in the affirmative, in favour of the Revenue and against the assessee.

3. The reference stands disposed of.

[Citation : 254 ITR 570]

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