The assessee claimed the payment to Texmaco for the purpose of having continuous supply of\u00a0 limestone as a raw material as revenue expenditure. The AO treated the said expenditure as capital expenditure. CIT(A) confirmed the order of the AO . On appeal the\u00a0 Tribunal held that payment made to Texmaco as deferred revenue expenditure thereby permitting the assessee to amortise the payment for a period of eight years . Reversing the order of the Tribunal the Court held that the responded had obtained a long term capitive source of the new raw material by purchase of right from Texmaco. However at the same time the raw material was required to be won , gotten and brought to the surface and as such , cannot be said to be\u00a0 a stock in trade , hence the question was answered in the negative and in favour of appellant . Followed R.B Seth Moolcahnd Suganchand v CIT (1972) 86 ITR 647 (SC)\u00a0 \u00a0\u00a0\u00a0\u00a0(ITA No 51 of 2008 dt 22-11-2019 \/ 2 -01 2020) (AY.1995 -96)<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 37(1) : Business expenditure \u2013 Capital or revenue – Payment to for the purpose of having continuous supply of limestone as a raw material \u2013 Held to be capital expenditure – Order of Tribunal directing for the payment to be amortised for a period of 8 years is held to be not valid \u2013 Question is answered in favour of the revenue . [ S.145 ]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-9399","post","type-post","status-publish","format-standard","hentry","category-digest"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-2rB","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/9399","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=9399"}],"version-history":[{"count":5,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/9399\/revisions"}],"predecessor-version":[{"id":49166,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/9399\/revisions\/49166"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=9399"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=9399"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=9399"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}