9911796707
TMI Blog1999 (3) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... 982-83, be called and the Income-tax Appellate Tribunal, Delhi, be directed to draw up a statement of the case, and to refer the following questions of law for opinion to this court : "(1) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was legally justified in holding that, the preoperational expense of Rs. 2,08,100 should be taken into account to work out the unexplained investment in the construction of factory building? (2) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was legally correct in holding that civil works expenses on foundation and water storage tank amounting to Rs. 6,16,963 were plant and machinery to be eligible for the claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d investment came to Rs. 1,76,374. Further, the Assessing Officer, while considering the question of investment allowance found that the assessee had included civil works amount of Rs. 6,16,963 under the heading of plant and machinery. He was of the opinion that no investment allowance is admissible on such civil work. In appeal, the Commissioner of Income-tax (Appeals), Meerut, held that there is no question of any unexplained expenses in view of the nature of public limited companies where projects are financed by borrowings from financial institutions or from share capital. The claim of the assessee for considering proportionate pre-operational expenses was held to be justified. He further held that civil work such as foundation of vario ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Act, 1961, seeking reference on the aforementioned two questions of law. The Tribunal, vide its order dated September 8, 1995, had rejected the reference application and bad declined to make any reference to this court. So far as the first question of law proposed by the Commissioner of Income-tax, Meerut, is concerned, we find that before the Tribunal, the question of pre-operational expenses was not at all raised. Further, the Tribunal did not consider the question of pre-operational expenses. It had, while upholding the deletion of unexplained expenses in the construction of factory building, held that the cost of construction worked out by the Valuation Officer cannot by any means be called scientific and marginal error of about fiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orage room, platform for machines, observation and cooling tower were expenditure incurred towards the installation of plant and machinery and were entitled to development rebate and depreciation applicable to the plant and machinery. The Rajasthan High Court in the case of CIT v. R. G. Ispat Ltd. [1994] 210 ITR 1018 had held that the massive reinforced concrete structure specially designed to take loads constitutes plant. So far as the water storage tank is concerned, the Bombay High Court in the case of CIT v. Electro Metallurgical Works (P.) Ltd. [1994] 207 ITR 494, had in somewhat similar circumstances held that the tanks and reservoirs which were concrete structures formed an integral part of the filtration plant, hence they had to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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