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TMI Blog1992 (7) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... should be included in the computation of capital of the fertilizer project of the assessee for the purpose of arriving at deduction allowable under section 80J of the Income-tax Act, 1961 ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the development rebate and depreciation were allowable in respect of Rs. 2,51,350 relating to the aforesaid railway siding ?" The facts which are admitted and/or found by the Tribunal are as under: During the year under consideration, the assessee had two projects in operation, viz., Detonator Project (Explosive) Division and Fertilizer Project. In computing the capital in the fertilizer project, the Income-tax Officer did not include a sum of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not have been constructed and utilised for the purpose of business. Consequently, the Appellate Tribunal allowed the claim of the assessee treating it as part of the cost of setting up the railway siding. On the same reason, the Tribunal also directed the Income-tax Officer to allow development rebate and depreciation. Before us, the Revenue reiterated the contentions raised before the Tribunal. It is an admitted position that the assessee is not the owner of the railway siding. The assessee had already transferred the land to the Railways and the railway siding was thereafter built by the Railways. It is, however, difficult to accept the position taken by the lower authorities with regard to the sum of Rs. 2,51,350 being the valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d.. There fore, in our view, it does not stand to reason and reality of the true effect of the transaction to say that such right cannot constitute an asset. May be, the asset does not represent any absolute right in the land but represents interest in the sidings on the land ; such interest not being ephemeral has to be treated as an asset. It must, therefore, be held that this sum of Rs. 2,51,350 spent by the assessee for the purpose of acquiring an advantage by way of the right to use the railway siding for the purpose of the business should be taken as an expenditure representing a capital asset for the purpose of section 80J. However, the interest acquired does not admit of an equation with ownership of the railway siding though avai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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