2016 (9) TMI 253 - HC - Income Tax

Expenses on travelling and retainer fees paid - Held that - Mr. Toor, the learned counsel for the applicant-assessee very fairly states that the issue arising herein stands concluded against the applicant-assessee and in favour of the Respondent-Revenue by the decision of this Court in Commissioner of Income Tax v/s. J. K. Chemicals Ltd. 1992 (10) TMI 18 - BOMBAY High Court and Larsen & Toubro Ltd. v/s. Commissioner of Income Tax ( 2012 (9) TMI 660 - BOMBAY HIGH COURT ). Eligibility for relief under Section 35D - the payment made after 31st March, 1970 to its promoters - Held that - As decided in favour of assessee relying on own case for A.Y. 1975-76 2012 (3) TMI 545 - BOMBAY HIGH COURT

Summary

Issues:
1. Whether expenses on travelling and retainer fees for a project are revenue in character and deductible.
2. Whether an amount paid to promoters for project development is eligible for relief under Section 35D.

Analysis:
1. Regarding Question no.(i):
- The applicant-assessee's counsel concedes that the issue is settled against the assessee by previous court decisions.
- Citing precedents, the court rules in favor of the Respondent-revenue, denying the deduction for expenses related to the Nagarjuna Project.

2. Regarding Question no.(ii):
- The applicant-assessee claimed a deduction under Section 35D for payments made to promoters post 31st March, 1970, for project development expenses incurred earlier.
- The Assessing Officer and higher authorities disallowed the claim, stating the expenditure was incurred before the specified date.
- The Tribunal's decision was based on similar rulings for previous assessment years.
- The applicant's counsel presents a favorable precedent from a previous case for the same issue.
- The court, following the precedent, rules in favor of the applicant-assessee, allowing the deduction under Section 35D.

The judgment concludes by disposing of the reference, with no order as to costs.