CIT vs. DELHI STATE CIVIL SUPPLIES CORPORATION LTD

ITA - 1892 / 2010HC Delhi03 December 20101 pages

For Petitioner: NP SAHNI

AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal. The Court noted that the issue of whether the flyover fees constituted capital or revenue expenditure had been decided in favour of the assessee for earlier assessment years (2003-2004 and 2004-2005). Appeals filed by the revenue against those decisions were dismissed by the High Court. Therefore, following the consistent view taken in the earlier years and the dismissal of the revenue's appeals, the Court held that no substantial question of law arose in the present appeal. The operative direction was the dismissal of the appeal, affirming the deletion of the addition made by the AO.

What were the facts?

The assessee, a Public Sector Undertaking, paid Rs. 2,25,16,386/- to M/s Delhi Tourism and Transport Corporation Limited as flyover fees. The assessee claimed this as a revenue expenditure. The Assessing Officer (AO) treated it as capital expenditure and disallowed it. The Commissioner of Income Tax (Appeals) [CIT(A)] and the Income Tax Appellate Tribunal (ITAT) deleted the addition. This deletion was based on earlier orders concerning the same assessee for Assessment Years 2003-2004 and 2004-2005. Appeals against those assessment years were filed and dismissed by the High Court. Specifically, ITA No. 923/2010 for Assessment Year 2004-2005 was dismissed on 23.07.2005.

What were the issues?

1. Whether the payment of Rs. 2,25,16,386/- as flyover fees by the assessee to another Public Sector Undertaking constitutes a revenue expenditure or a capital expenditure? (Question of law and fact, concerning the nature of expenditure). Assessee's Contention: The assessee argued that the expenditure was revenue in nature. The ITAT and CIT(A) had deleted the addition, following previous orders on the same issue for earlier assessment years. Revenue's Contention: The revenue contended that the expenditure was capital in nature, leading to its disallowance by the AO. The revenue filed appeals against the ITAT's orders for earlier assessment years, which were dismissed by the High Court.

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF DELHI AT NEW DELHI . 03.12.2010 . Present: Mr. N.P.Sahni, Advocate for the Appellant. . + ITA No.1892/2010 . . The respondent is a Public Sector Undertaking during the year in question it had paid a sum of Rs.2,25,16,386/- to another Public Sector Undertaking viz., M/s Delhi Tourism and Transport Corporation Limited as contribution towards flyover fees. This amount was claimed as an expenditure of revenue in nature. The Assessing officer, however, was of the view that the expenditure was of capital nature and he therefore, disallowed the same. The CIT(A) as well as ITAT had deleted the addition referring to the earlier orders passed in respect of the same assessee on this very issue for the Assessment Years 2003-2004 and 2004-2005. The appeals against those Assessment Years were filed and dismissed by this Court. One such appeal i.e ITA No.923/2010 which pertains to the Assessment Year 2004-2005 was dismissed vide orders dated 23.07.2005. No question of law therefore arises. Dismissed. . . A.K. SIKRI, J. . SURESH KAIT, J. DECEMBER 03, 2010 hk . . #14

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