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2010 (1) TMI 39 - DELHI HIGH COURTApplicability of Section 35E - business of prospecting and exploring ores and minerals – AO did not accept the argument on the ground that The apparent reason for change in accounting policy seems to be the provision of Section 35E of the Income Tax Act which allows expenditure of four years prior to the year in which commercial production is started to be claimed in the year of the commercial production and so on – AO alleged that it has changed its accounting policy so that the provision of Section 35E is circumvented and the losses are claimed as business losses which are allowed to be carried forward for 8 years – held that - the present case, the Tribunal has, on facts, come to the conclusion that the assessee company‘s objects did not include mining of ores or minerals or commercial production, in the sense understood within the meaning of Section 35 E of the said Act. Consequently, the Tribunal agreed with the assessee‘s contention that there would never be commercial production of any mineral or ore as a part of the activities of the assessee in view of the very objects of the assessee company and the FIPB permission given to the assessee company. Consequently, the provisions of Section 35 E would not be applicable to the facts and circumstances of the present case as there was no possibility of any commercial production – decided in favor of assessee – revenue appeal dismissed.
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