2002-VIL-385-RAJ-DT

Equivalent Citation: [2002] 257 ITR 479, 123 TAXMANN 480

RAJASTHAN HIGH COURT

Date: 31.01.2002

COMMISSIONER OF INCOME-TAX

Vs

STONES AND MINERAL ASSOCAITED LTD.

BENCH

Judge(s)  : Y. R. MEENA., A. C. GOYAL.

JUDGMENT

On an application filed under section 256(1) of the Income-tax Act, 1961, the Tribunal has referred the following questions for the opinion of the court:

"Whether, on the facts and in the circumstances of the case, the expenses of Rs.23,698 incurred by the assessee in procurement of materials for exports, though no materials were actually procured and no export was actually done, could be allowed as a revenue expenditure, though such expenses have been incurred very much after the company has come into existence?"

The assessee-company was set up for the purpose of export of granite, bricks, chips and monumental stones out of India. The relevant assessment year is 1978-79. The assessee has procured certain orders for export and also placed orders for procurement of material for the purpose of export. In export, before actual export, licence is obtained for export. In the present case, the assessee has claimed a loss of Rs.23,698 as preliminary expenses for setting up of the business.

In concluding para. the Tribunal has found the following facts:

"In page 20 of the book let filed by the assessee, the assessee has shown the amount paid to parties for carrying out the supply of granite as well as their polishing and cutting. It also shows advances given to various parties for supply of granite stones. The lease also has been provided to the assessee on December 23, 1978, for excavation of stones from mines. In December, 1978, the assessee has been registered as an exporter and has been allowed to export the goods, and the assessee has received orders from the customers from out of India from November, 1978. Looking into the totality of the expenditure it only goes to indicate that the expenses are very very nominal and also looking into the entire facts of the case, we are of the view that the assessee's business has been set up in the year, which is purchase and export of the goods. No doubt, the assessee has not actually carried out purchases or the sales but has done all the requirements of the provisions and advances, etc., towards purchases and did not actually carry on the purchasing as the importer could not arrange for the transport of the goods."

Considering the facts brought on record, as considered by the Tribunal, in our view, no interference is called for in the view taken by the Tribunal.

In the result, we answer the question in the affirmative, i.e., in favour of the assessee and against the Revenue. The reference so made stands disposed of accordingly.

 

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