COMMISSIONER OF INCOME TAX Vs. FLEXICONS LIMITED

JUDGEMENT

(1.) THE question referred to us, at the instance of the Revenue, reads thus :

(2.) THE relevant assessment years are 1967 68, 1968 69, 1969 70 and 1970 71 for which the previous years ended on June 30, in 1966, 1967, 1968 and 1969, respectively. During the construction of a factory, the assessee had incurred expenditure aggregating to Rs. 89,900 which was capitalised and allocated thus : For the relevant assessment years, the assessee claimed that the said amount of Rs. 89,900 should be taken as forming part of the assessee's assets and depreciation should be allowed thereon. The ITO and the AAC rejected the assessee's contention. The Tribunal allowed the second appeal by the assessee before it. It held that the amount of Rs. 89,900 had to be taken as part of the cost of the fixed assets of the assessee and should be taken into account for the purpose of capital computation.

(3.) THE question is answered accordingly in the affirmative and in favour of the assessee.