COMMISSIONER OF INCOME TAX Vs. NIRMA LTD.

JUDGEMENT

(1.) By way of this appeal under section 260A of the Income -tax Act, 1961, the appellant -revenue has challenged the order dated 24.3.2006 passed by the Income -tax Appellate Tribunal, Ahmedabad, (hereinafter referred to as "the Tribunal") whereby the Tribunal has partly allowed the appeal of the assessee by confirming the order of the Commissioner (Appeals).

(2.) While admitting the appeal, this court framed the following substantial question of law:

(3.) The facts of the case are that the assessee filed its return of income declaring total income at Rs. 19,26,06,270/ -. The return was processed and the Assessing Officer determined the income of the assessee. While making the assessment, the Assessing Officer found that the assessee claimed deduction in respect of contribution of Rs. 1.25 crore made to Gujarat Energy Development Corporation. The Assessing Officer treated the said expenditure as capital expenditure. Being aggrieved, the assessee went in appeal before the Commissioner (Appeals) who held in favour of the assessee by directing the Assessing Officer to allow the contribution paid to GEDA. On appeal to the Tribunal, the Tribunal has held the said expenditure is revenue in nature on the ground that ownership is not vested with the assessee.