| COURT: | Calcutta High Court |
| CORAM: | Abhijit Gangopadhyay J, Sanjib Banerjee J |
| SECTION(S): | 37(1) |
| GENRE: | Domestic Tax |
| CATCH WORDS: | capital vs. revenue expenditure |
| COUNSEL: | Brijesh Singh, Smita Das, Subash Agarwal |
| DATE: | June 21, 2018 (Date of pronouncement) |
| DATE: | August 17, 2018 (Date of publication) |
| AY: | - |
| FILE: | Click here to view full post with file download link |
| CITATION: | |
| S. 37(1): Law on whether payment of a one-time fee to continue the business of mining constitutes capital expenditure or revenue expenditure explained with reference to R.B.Seth Moolchand Sugachand v CIT 86 ITR 647 (SC) and Bikaner Gypsums 187 ITR 39 (SC) | |
The distinction between the judgment in R.B. Seth Moolchand Sugachand and the judgment in Bikanker Gypsums Ltd is that in Bikaner Gypsums Ltd there was a pre-existing right and the expenditure was incurred not to assert a new right but to exercise a pre-existing right. In the present case, it is the same as in Bikaner Gypsums Ltd. since the mining licence was previously issued in favour of the assessee and the payment of the NPV did not extend the area of the assessee’s mining operations, it merely removed an impediment in the carrying on of the operations in terms of the original licence
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