Delhi High Court Judgments — 2009

The Tribunal held that the Additional Director of Income Tax (Investigation) did not have the power to issue the warrant of authorization. Consequently, the limitation period was reckoned from an earlier date, favoring the assessee.

The Tribunal correctly held that interest earned on deposits made for acquiring assets for setting up a plant is incidental to the acquisition and not taxable as 'Income from other sources' if directly linked to the purchase. Even if treated as 'Income from other sources', interest paid on borrowings for such deposits is deductible under Section 57(iii).

The Tribunal held that the interest earned from deposits could be set off against interest paid on borrowings, and the difference could be capitalized as pre-operative expenses. The High Court upheld the Tribunal's decision, finding no perversity.

The Tribunal held that the closure of one unit did not constitute closure of the entire business, as the assessee had other units carrying on similar operations. Consequently, expenses related to the closure of the unit were allowed as business expenditure.

The Tribunal held that the closure of one unit did not constitute closure of the entire business, as the assessee had other units carrying on similar operations. Consequently, expenses related to the closure of the unit were allowed as business expenditure.

The Tribunal's finding that the land was not agricultural was perverse. The High Court held that the intention to use land for industrial purposes or the absence of agricultural operations does not alter its character if it was agricultural on the date of purchase and acquisition.