2002-VIL-383-P&H-DT

Equivalent Citation: [2002] 254 ITR 267, 173 CTR 510, 121 TAXMANN 720

PUNJAB AND HARYANA HIGH COURT

Date: 08.01.2002

COMMISSIONER OF INCOME TAX

Vs

INDUSTRIAL CABLES (INDIA) LTD.

BENCH

Judge(s)  : JAWAHAR LAL GUPTA., N. K. SUD.

JUDGMENT

The judgment of the court was delivered by

JAWAHAR LAL GUPTA J.-The assessee-company set up an industrial unit in a backward area. It constructed temporary quarters for the labour. It also provided a kacha (temporary) road for the quarters. The assessee claimed that the expense was a revenue expenditure. The Assessing Officer did not accept the claim. On appeal, the Commissioner of Income-tax (Appeals) found that the construction was temporary. The entire expenditure was admissible as revenue expenditure under section 37 of the Income-tax Act, 1961. On appeal, the Tribunal held that the deduction had been rightly allowed by the appellate authority.

The Revenue filed a petition under section 256(1) of the Act. On a consideration of the matter, the Tribunal has referred the following question for the opinion of this court:

"Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in allowing expenditure on kacha road linking workers' quarters with factory as assessee's revenue expenditure?"

Admittedly, the company had made a kacha road. It was not an asset of an enduring nature. Thus, it was rightly treated as a revenue expenditure for the purpose of section 37 of the Act. Even if it be treated as a capital expenditure, in view of the admitted position that it was a temporary structure, the assessee was entitled to claim 100 per cent. depreciation.

In view of the above, the question is answered in the affirmative, i.e., against the Revenue and in favour of the assessee.

No costs.

 

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