Merely looking at B/s and P/L A/c, one cannot infer nature of expenditure

Hon’ble Bombay High Court in Amitabh Bachan Corporation Ltd.,(supra) held that whether an expenditure was on revenue account or capital account is required to be examined in the light of the totality of all facts for this purpose. Evidence would be required in the form of documents and accounts and that, by merely looking at the balance-sheet and profit and loss account, one cannot infer the nature of the expenditure. Accordingly, relying upon their decision in Khatau Junkar Ltd. [1992] 196 ITR 55 ,Hon’ble High Court concluded that such an exercise generally cannot be done by way of adjustments to the returns under section 143(1)(a) of the Act.

INCOME TAX APPELLATE TRIBUNAL DELHI

ITA no.67/Del. /2010 – Assessment year: 1998-99

Assistant CIT

Vs.

Please become a Premium member. If you are already a Premium member, login here to access the full content.