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TMI Blog1988 (8) TMI 379X X X X Extracts X X X X X X X X Extracts X X X X ..... eal before the Supreme Court under section 261 of the Income-tax Act, 1961. The facts are that the assessee is a company engaged in aluminium industry. During the accounting years relevant to the assessment years 1965-66 to 1969-70, the assessee incurred expenditure of Rs. 3,07,865, Rs. 3,26,067, Rs. 5,53,765, Rs. 2,47,665 and Rs. 6,922, respectively, under the head "Prospecting and investigation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Reference being No. 215 of 1977 (sic) came up for hearing before Mr. Justice Dipak Kumar Sen (as his Lordship then was) and Mrs. Justice Monjula Bose, who by their judgment dated July 22, 1986 (sic), answered the question in favour of the assessee following the earlier order made in Income-tax Reference No. 62 of 1977 dated January 7, 1986. (Hindustan Aluminium Corporation Ltd. v. CIT [1986] 159 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arted on May 14, 1962. It was not quite correct to say that this expenditure was incurred in its entirety during the construction stage or prior to the production stage. A part of it was undoubtedly spent subsequently. Bauxite was the raw material for the aluminium plant established in the assessee's factory. It was its stock-in-trade. The expenditure was incurred in order to enable the assessee t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial questions of law: "(i) Whether prospecting and investigating expenses incurred before commencement of business to find out the source of raw materials are capital or revenue in nature ? (ii) Whether expenses on prospecting and investigation incurred at the pre-production stage for the purpose of quality and quantum of raw materials available are to be treated as revenue expenditure. ? (i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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