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TMI Blog1988 (3) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... itution was in the offing. The building was on the government land. Adjoining thereto, there was 6 acres of open plot of land belonging to Gram Panchayat. The Gram Panchayat was willing to hand over the plot of land belonging to Gram Panchayat. The Gram Panchayat was willing to hand over the plot to the middle school, the upgradation of which was under consideration. It is at that stage the assessee proposed not only to renovate the existing building but to put up extension and provide all furniture, fittings, etc., as per the approved plan of the State Government. Even a play ground has to be formed. 4. The assessee proposed to the government to develop the building in the manner required of them by expending money and the Gram Panchayat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... objecting to the relief given by the CIT(A). 6. There is no dispute that the development programme embarked upon by the assessee was one to which deduction under s. 35CC(1) was allowable and the CIT, Rohtak, had too granted approval in this regard. So far as the cost is concerned, the finding of the CIT(A) remains intact since no specific ground is raised. The only point on which argument was addressed was that the assessee had not divested itself of ownership of the asset created by the expenditure incurred. In a sense the argument proceeded on the assumption that the asset created was of the ownership of the assessee. 7. Expenditure had been incurred and this had resulted in creation of an asset. The whole programme of rural developm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... than a licenses to enter upon the land to undertake development work. The object is to complete the development programme by renovation, construction, etc. and when this purpose is over, the permission ceased to be in operation. So, this was a case where licence got revoked the moment the purpose for which it was granted was fulfilled-see s. 62(f), Easements Act. 9. An asset may be acquired or brought into existence during the course of a rural programme contemplated under s. 35CC in a variety of manners. In a given case, there may be an asset created or brought into existence, the ownership of which could definitely be located in the assessee. On the basis of sub-s. (2) of s. 35CC, it cannot be assumed that the assessee became the owner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the complexion then alone. The payments in this case were in truth payments of donation. As a matter of fact, the assessee has completed development programme and delivered back possession of the school building to the State Government. 11. Take the case of renovation or play ground formed. The old building and the open space were assets of State Government/Gram Panchayat. It can hardly be said that improving old school building or forming the play ground produced a recognizable or identifiable new asset. What matters is the nature of the advantage the assessee was expecting to get by the expenditure. It can hardly be doubted that what the assessee intended to secure by the expenditure was no more than a deduction under s. 35CC(1). We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat in order to provide the requisite facility, the assessee and the other two companies should bear the cost of construction of the platform and the other facilities to be provided. The three companies agreed. As per the share of the assessee-company, the payment of Rs. 56,570 had been made in this accounting year to the railways. This expenditure was held to be in the capital field by the IAC but the CIT(A) disagreed and, following the decision of the Tribunal in the case of the assessee for the earlier asst. yr. 198-82, held that it was a revenue expenditure. The addition, therefore, came to be deleted. 14. After having heard both sides and reading the order of the Tribunal for asst. yr. 1981-82, we are convinced that the assessee deri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that limitation has run out, it only bars the remedy in a Court of law but the liability as such is not wiped out. This is not a case where there has been a cessation or remission of liability or abandonment of the claim by the creditor. (1987) 167 ITR 634 (Raj) is in point. The finding of the CIT(A) is in order and we affirm the same. 17. In the appeal for 1983-84, the first ground relating to s. 35CC has already been dealt with and for the reasons given, we reject the first ground. 18. The second ground is in the alternative. It is contended that depreciation should have been allowed as done by the IAC in the assessment under s. 35CC(2). Since the claim has been allowed under s. 35CC(1), this does not survive at all. 19. The last g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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