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TMI Blog2007 (1) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... st 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 question of law arises and, therefore, we dismiss the appeal in that regard. 4. The assessee is engaged in the business of manufacturing pipes. It manufactures pipes used for oil and gas sector, rerolling of SS strips and manufacturing cold rolled SS strips of thicker gauge from hot rolled SS strips. It has three running units. 5. The fourth unit that we are concerned with is somewhere close to Nasik. 6. The assessee, for the purposes of its four ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TR 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 alternating current and for this purpose the assessee had paid some amount to the municipal committee being the cost of laying cables which belonged to the municipal committee. The Tribunal held that the expenditure incurred was of a capital nature but this view was not upheld by this court. The Division Bench was of the view that the word "enduring" has a special significance. It adopted the view expressed by the House of Lords in IRC v. Carron Co. [1968] 45 TC 18 at pag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. [1998] 233 ITR 468 wherein the Supreme Court summarized the law as laid down in Assam Bengal Cement Co. Ltd. v. CIT [1995] 27 ITR 34 in the following words (page 473) 1. Outlay is deemed to be capital when it is made for the initiation of a business, for extension of a business, or for a substantial replacement of equipment. 2. Expenditure may be treated as properly attributable to capital when it is made not only once and for all, but with a view to bringing into existence an asset or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, the expenditure. Incurred by the assessee should be treated as a revenue expenditure. 16. The issue whether the assessee started a new business or not should not detain us for long because the admitted position is that the assessee is one entity for the purposes of taxation although it may have more than one unit In the instant case, the assessee has four units. In Veecumsees v. CIT [1996] 220 ITR 185 (SC), the assessee ran two businesses, that is, one being a jawellery business and the second being e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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