UNITED SPIRITS LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) By an order of a Division Bench of this Court dated 12th June, 2006, this appeal under Section 260A of the Income Tax Act, 1961, was admitted on the following substantial questions of law:

(2.) The reference to the appellant will include their predecessor-in-interest. Briefly the facts are these:-

(3.) The appellant contends before us that they did not have any permanent interest in the property. Even their right, title and interest as a tenant, was disputed. They filed a suit against M/s. Satya Sai Properties Limited and M/s. Anam Corporation praying for their eviction on the ground that the appellant needed the portion occupied by them, namely, the fourth floor, for their business. In those circumstances it paid Rs.62 lakhs to M/s. Satya Sai Properties Limited and M/s. Anam Corporation. Similarly, it paid Rs.21.20 lakhs to Mr. B. K. Roy (P) Ltd. to vacate the third floor of the premises. The question which falls for consideration is whether this expenditure incurred by the company was capital or revenue in nature?