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Acquisition of mining rights for long lasting source of raw material is capital expenditure
Case Law Details
- Case Name
- CIT Vs Zuari Industries Ltd. (Bombay High Court)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Related Assessment Year
- 1995-96
- Courts
- All High Courts, Bombay High Court
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CIT Vs Zuari Industries Ltd. (Bombay High Court)
Conclusion: Since Zuari had obtained a long term captive source of the raw material by purchase of right from Texmaco for mining of limestone by operating the cement plant, therefore, the raw material was required to be won, gotten and brought to the surface and as such, could not be said to be revenue expenditure.
Held: Texmaco, which was a concern in the manufacture of cement was holding a lease from Andhra Pradesh Government for mining of limestone from vast tract of land. Texmaco had become a sick unit and a reference was pending before the...
