9911796707
TMI Blog2001 (3) TMI 270X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Income-tax (Appeals)-IV, Chennai, [CIT(A) for short] dt. 28th June, 1999, wherein he had upheld the orders of the Assessing Officer (AO for short) in treating the entire expenditure claimed by the assessee as deduction as in the nature of pre-operative expenses. 2. The submission made by the learned counsel for the assessee before us was that the fact that the assessee-company w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al. The assessee accordingly called for capital from the public and issued shares. The assessee-company explored the project of setting up of a unit for the manufacture such sewing machine needles and in that connection incurred several expenditure. The assessee had been incurring expenses in regard to its activities namely, bill discounting, financial and other consultancy activities. In addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aper book that comprises of correspondence that were exchanged in connection with the assessment proceedings. He was emphatic that the authorities have justifiably treated the entire expenditure as capital in nature. He referred to the decision of the Supreme Court in Godhra Electricity Co. Ltd. vs. CIT (1997) 139 CTR (SC) 564 : (1997) 225 ITR 746 (SC) for the proposition that income was rightly t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we may observe that the assessee is not at all disputing the fact that the income that has been offered by it namely, bill discounting, interest, etc. are taxable. The dispute of the assessee is that the expenditure that is relatable to the setting up of the needle manufacturing unit has been capitalised and that there are other expenses incurred by it on the administration and for purposes of ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ute and as observed above, the assessee is seeking deduction of certain expenses. The claim of the assessee, in our opinion, is allowable because the expenses have been partly incurred in the normal course with the setting up of the needles manufacturing unit. The expenses relatable to the new unit have been identified and have been capitalised. We, therefore, direct the AO to allow deduction of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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