COMMISSIONER OF INCOME TAX Vs. FOSECO INDIA LTD.

JUDGEMENT

(1.) In this appeal by the Revenue for the assessment year 1999-2000, the following reframed question of law has been raised for our consideration:

(2.) In appeal, the Commissioner of Income-tax (Appeals) also upheld the order of the Assessing Officer and held that the expenditure incurred on the voluntary retirement scheme at the Jamshedpur and Jammu units cannot be allowed as revenue expenditure under section 37 of the Act. On further appeal, the Tribunal allowed the respondent-assessee's appeal. The Tribunal rendered a finding of fact that the respondent-assessee's business is one single business even though each unit may claim deduction under section 80HH of the Act independently. The closure of its Jamshedpur and Jammu units has not resulted in closure of its business. This was done for the purposes of restructuring so as to achieve modernisation. Further, the impugned order holds that the facts of the respondent-assessee's case were similar to the case of K. Ravindranathan Nair v. CIT, 2001 247 ITR 178 . The Tribunal held that the voluntary retirement scheme offered due to labour problems or as part of the restructuring process would not make a difference. The fact is that the assessee's business is spread over India in various units and out of these units, the assessee has closed two units during the year for the purpose of relocating its business at Sanaswadi, Pune. In view of this, the Tribunal held that the expenditure paid to the employees of the Jamshedpur and Jammu units for the purpose of the voluntary retirement scheme can only be considered as an expenditure incurred in the course of the business. The incidental expenses incurred in restructuring the business has to be considered as expenditure incurred in the course of conducting the business and allowable under section 37(1) of the Act.

(3.) We find that the facts of the present case as held by the Tribunal are similar to the one existing in the case of Ravindranathan Nair, 2001 247 ITR 178 . As the decision of the Tribunal is based on finding of the fact, we see no reason to entertain the proposed question of law. Accordingly, the appeal is dismissed with no order as to costs.