Case Law Details
Tatia Sky Line & Health Farms Ltd. Vs ACIT (Madras High Court)
Conclusion: Expenses incurred by assessee for Public Issue was not allowable as revenue expenditure as assessee miserably failed to establish the tenability and truthfulness of its claim that the expenditure was revenue in nature.
Held: Assessee, a public limited company, was in the business of running health farms and resorts. For the assessment year under consideration, assessee, in its return of income, claimed a sum of Rs.1,89,84,676/- as revenue expenditure. AO called upon the assessee to furnish details to which, assessee responded stating that the said amount represented the expenses incurred by assessee for public issue. AO rejected the claim made by assessee on the ground that expenses incurred for public issue had to be treated as a capital expenditure. It was held that CIT(A) found that assessee miserably failed to establish the tenability and truthfulness of its claim that the expenditure was revenue in nature. Once again before the Tribunal, assessee made further attempt on the same grounds, which were considered by the Tribunal in great length and it was rejected. Hence appeal file by assessee was dismissed.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
This appeal, filed by the appellant/assessee under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), is directed against the order dated 31.08.1998, passed by the Income Tax Appellate Tribunal Chennai Bench ‘C’ (for brevity “the Tribunal”) in I.T.A.No.219/Mds/1998 for the assessment year 1994-95.
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