MANOJ TEXTILES Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) SINCE both the aforesaid cases involve identical questions of law, they are being disposed of by this common order and for the disposal of these cases, the facts of the case of Manoj Textiles v. CIT (D.B.I.T. Reference No. 65 of 1989) are being taken up.

(2.) THE brief facts of the case are that a sum of Rs. 5,338 was paid by the assessee to RIICO as development charges which was considered by the Income-tax Officer as capital expenditure as it related to the development of the land which was leased for 99 years. After taking into consideration the various clauses of the agreement, the Tribunal came to the conclusion that RIICO has made two charges on the lessees-one the lease for the land and another the development expenses incurred by them of these industrial plots. THEse development expenses have been incurred by RIICO so that the entire industrial belt is developed according to the standards fixed by it. It was further said that: