9911796707
TMI Blog2007 (1) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... enue is aggrieved by an order dated November 12, 2002, passed by the Income-tax Appellate Tribunal, Delhi Bench "F" in I. T. A. No. 3007/ D/97 relevant to the assessment year 1994-95. 2 The Revenue has raised two issues. In so far as the first issue is concerned, learned counsel for the respondent fairly concedes that a substantial question of law has been framed by this court in several other cases and, therefore, he does not contest the first issue. On this basis we frame the following substantial question of law: "Whether the Income-tax Appellate Tribunal was correct in law in deleting interest under section 234B of the Income Act, 1961?" 3 In so far as the second issue is concerned, we are of the view that no substantial ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned counsel for the Revenue was that the laying of the service line was a benefit of an enduring nature for the assessee and, therefore, it was in the nature of a capital expenditure and the view taken by the Assessing Officer was correct in law. Secondly, it was submitted that the assessee had not commenced its business and, therefore, the expenditure incurred was of a capital nature. 10. Our attention has been drawn to Hindustan Times Ltd. v. CIT [1980]122 ITR 977, which is a decision rendered by a Division Bench of this court. In that case, the assessee was getting supplies of direct current from the municipal committee to work its machines in its business premises. The cables were replaced at the instance of the assessee by al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ouched. 12. Reference has also been made to CIT v. Excel Industries Ltd . [1980] 122 ITR 995 (Bom) wherein the same principle was adopted and it was held that though the service lines were laid for the benefit of the assessee being the property of the Gujarat Electricity Board, that did not mean that the assessee had acquired any capital asset or an enduring benefit or advantage and the object of making the payment was purely one of commercial expediency. On this basis, it was held that the payment made to the Gujarat Electricity Board towards the cost of laying the overhead service lines constituted revenue expenditure and was an allowable deduction. 13. Our attention has also been drawn to CIT v. Madras Auto Service P. Ltd . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge which the assessee derived by spending the money was that it got a lease of the new building and from the business point of view, it also got a benefit of reduced rent. It was, therefore, held that the High Court had rightly considered this as obtaining a business advantage and, therefore, the expenditure would be revenue expenditure. 15. In so far as the case that we are dealing with is concerned, it is correct that the assessee had spent an amount of about Rs. 52 lakhs towards laying of service lines but the cables did not belong to the assessee but belonged the MSEB and, therefore, applying the ratio laid down by the Supreme Court, the benefit that the assessee got was of a commercial nature and a business advantage. Consequently, ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
