Brief of the Case
Bombay High Court held In the case of CIT vs. M/s Manganese Ore India Limited that in the present case, the capital assets has never come into existence and accordingly ITAT has allowed travelling expenses or ore testing charges only as revenue expenditure. The travelling expenses or manganese ore testing charges pertaining to the existing mine allowed by the ITAT in the present facts cannot be directly correlated with the acquisition of any capital asset. Also, it is clear that study undertaken by the foreign company i.e M/s. Seltrust Engineering Company Limited, U.K. was in connection with working of assessee’s existing mines and optimization of the existing product. It did not relate in any way to proposed new plants. Hence, no capital asset comes into existence and accordingly expenses are revenue in nature.
Facts of the Case
The revenue raised 4 substantial questions of laws –
1. Whether on the facts and in the circumstances of the case, the I.T.A.T. was correct in holding that the payments of Rs.86,554/made to D.S. Basu of M/s Dastur & Co., and others is a revenue expenditure ?
2. Whether on the facts and in the circumstances of the case, the I.T.A.T. was correct in holding that the payment of Rs.81,885/ made to Mountain States Research & Development U.S.A. is a revenue expenditure ?
