2002 (1) TMI 22 - HC - Income Tax

Whether, on the facts and in the circumstances of the case, the expenses of Rs.23,698 incurred by the assessee in procurement of materials for exports, though no materials were actually procured and no export was actually done, could be allowed as a revenue expenditure, though such expenses have been incurred very much after the company has come into existence? - we answer the question in the affirmative, i.e., in favour of the assessee and against the Revenue.

Summary

The High Court of Rajasthan ruled in favor of the assessee regarding the claim of expenses for procurement of materials for exports, even though no materials were actually procured or exported. The Tribunal found that the assessee had taken necessary steps for export business setup, and the expenses were nominal. The court upheld the Tribunal's decision, stating no interference was required. The question was answered in favor of the assessee and against the Revenue.