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TMI Blog1999 (12) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... correct in law in holding that expenditure of Rs. 58,000 (Rs. 10,000 as security and Rs. 48,000 on construction of the partition wall, wooden cabins, rooms, etc.) was a revenue expenditure ? 2. Whether, on the facts and circumstances of the case, the Income-tax Appellate Tribunal was correct in law in holding that expenditure of Rs. 28,928 incurred in India on hospitality to foreign buyers was eligible for weighted deduction under clause (i) of section 35B(1)(b) of the Incometax Act ?" The assessee is a limited company, engaged in the business of export of garments and handicrafts. The relevant accounting year ended on March 31, 1981. The assessee applied for an industrial shed in the industrial complex developed by the Delhi State In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vant to the assessment year in question, under no principle of accountancy could it be taken into consideration for computing total income for the relevant accounting period, namely, the year ended March 31, 1981. Having held so, the Commissioner of Income-tax (Appeals) did not go into the question whether the expenditure was of revenue or capital in nature. The assessee carried the matter in further appeal to the Tribunal. The Tribunal, without going into the aforenoted issue decided by the Commissioner of Income-tax (Appeals) and placing reliance on the decision of the Supreme Court in Empire Jute Co. Ltd. v. CIT [1980] 124 ITR 1, held that since the assessee had not received any benefit in the capital field, it was entitled to the dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or allotment of the industrial shed by the DSIDC to the assessee and the reason for its cancellation/non-allotment, even the Tribunal has not addressed itself to the real issue arising in the case. The main question before the Tribunal was whether the assessee could write off in its accounts for the period ended March 31, 1981, as revenue loss, the expenditure incurred by it in the earlier years and treated as capital expenditure in the four immediately preceding years. We do not find any discussion in the Tribunal's order on this aspect of the matter. Irrespective of the fact when the expenditure was incurred, the Tribunal proceeded to decide the question in a general form, namely, whether the expenditure in question was revenue or capital ..... X X X X Extracts X X X X X X X X Extracts X X X X
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