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TMI Blog1992 (7) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... t the expenditure of Rs. 85,400 incurred by the assessee for obtaining high tension power line from Ahmedabad Electricity Co. (AEC) is a revenue expenditure to be allowed as a deduction from the profits of the business by following the judgment of the Gujarat High Court in the case of CIT vs. Gujarat Mineral Development Corporation (1981) 20 CTR (Guj) 73 : (1981) 132 ITR 377 (Guj). The Revenue has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated cost on job work amounted to Rs. 85,400 while the security deposit amounted to Rs. 16,200. The security deposit was to be adjusted against the future bills to be received from the AEC and this was treated as a deposit and, therefore, the ITO disallowed the same. As regards Rs. 85,400 the ITO has not followed the judgment of the Gujarat High Court on the ground that the Department has not acce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the authorities under its jurisdiction. As regards merits, the ratio in the case of Gujarat Mineral Development Corpn. applies with equal force to the case of the assessee because the facts are similar. It is seen that the ownership of the equipment for transmission of the high tension power always remained with the AEC and the payment has been made only for obtaining the facility of high tension ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a case where the expenditure fell in the revenue field and not capital field even though the advantage derived from it had enduring benefit. In the case of CIT vs. Associated Cement Co. Ltd. (1988) 70 CTR (SC) 28 : (1988) 172 ITR 257 (SC), the assessee-company provided water pipe lines and electricity facilities to the Municipality in consideration of non-payment of municipal taxes for 15 years. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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