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TMI Blog1993 (11) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowing the claim of the assessee-company in terms of section 35(2) of the Act to the extent of Rs. 4,59,691 as aforesaid ?" The background facts as culled out from the statement of case are as follows : The assessee is a limited company. For the assessment year 1980-81 relevant to the accounting year ending on October 31, 1979, the assessee claimed deduction of Rs. 44,74,837 under section 35(2)(ia) of the Act for a pilot plant for the research and development laboratory. The Income-tax Officer, Ward A, Sambalpur, found that the amount of Rs. 4,59,691 was the opening balance carried forward as work-in-progress from the earlier year. He was of the view that the capital expenditure incurred in any previous year is to be allowed for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to existence in a subsequent year. It is contended that the normal practice of the assessee-company was to debit expenditure in the work-in-progress account of a particular project and carry forward such expenditure during the pendency of its construction and to transfer the total amount spent to the respective capital expenditure account in the year in which the construction is completed. It was, according to it, a sound accounting principle. Learned counsel for the Revenue supported the conclusions of the authorities. In the case at hand, the payments were made against running bills for work actually performed and it was not established that any part of the payments represented advance for which the concerned contractor had not done any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd ; and (b) the acquisition of any land shall be deemed to have been made by the assessee on the date on which the instrument of transfer of such land to him has been registered under the Registration Act, 1908 (16 of 1908), or where he has taken or retained possession of such land or any part thereof in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 (4 of 1882), the date on which he has so taken or retained possession of such land or part;". The words "incurred in any previous year" in clause (ia) go to negative the contention of the assessee. These words categorically lay down that the entire capital expenditure incurred in any previous year can be deducted for that previ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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