9911796707
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Issues involved:
The judgment addresses four questions of law raised by the revenue regarding the treatment of project expenses, legal expenses, foreign travel expenses, and interest disallowance under the Income Tax Act. Project Expenses and Legal Expenses: The Tribunal found that the expenses incurred by the assessee were related to the same line of business and therefore allowable as revenue expenditure. These expenses included salary, conveyance, legal and professional charges, printing, and stationery, all of which were deemed revenue in nature. The Tribunal's decision to allow these expenses as revenue expenditure was upheld. Foreign Travel Expenses: The Tribunal allowed the claim of the assessee for foreign travel expenses, citing a previous decision and the criteria for allowing such expenses. The court referred to a previous case law stating that depending on various factors like the nature of the trade, purpose of expenses, and object sought to be achieved, such expenses may be allowed. Since similar expenses were allowed in the past and after considering all facts on record, the Tribunal's decision to allow the claim was upheld. Interest Disallowance: The I.T.A.T. found that the borrowed funds were utilized for the business purpose in a new unit that had not yet commenced commercial operations. Therefore, the interest on borrowed funds was required to be allowed, even though the assessee had capitalized the interest in its books of account. Citing a Supreme Court case, the court held that interest on borrowed capital utilized for business purposes should be allowed. Consequently, the decision to dismiss the appeal regarding interest disallowance was upheld.
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