1 itxa3837-09 sas IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.3837 OF 2009 The Commissioner of Income Tax, Central-I ..Appellant. V/s. M/s. Carol Info Services Ltd. ..Respondent. Mr. P.S. Sahadevan with Ms. Anamika Malhotra for appellant. Mr. P.J. Pardiwala, senior Advocate with A.K. Jasani for respondent. CORAM : J.P. DEVADHAR AND R.M. SAVANT, JJ. DATED : 30TH NOVEMBER, 2010 P.C. :- 1. The question of law framed by the Revenue in this appeal is as under:- " Whether on the facts and in the circumstances of the case and in law, the ITAT is justified in holding that the amount of Rs.2,36,61,998/- is revenue expenditure and not capital expenditure ? " 2. The assessee engaged in the business of manufacturing bulk drugs, biologically derived agri products, etc. had entered into a joint venture in China and for that purpose advanced amount of Rs.2.36 crores. As the project had to be abandoned due to adverse conditions in China, the assessee wrote off the advances and claimed it as revenue expenditure. 2 itxa3837-09 The Assessing Officer disallowed the claim. The CIT (A) allowed the claim of the assessee and the Tribunal upheld the order of CIT(A). The reasons recorded for allowing the claim of the assessee are:- (a) the abandoned project was a project in the same line of business as the existing business and the same is established by the documents produced by the assessee. (b) no capital asset of enduring nature came into existence as a result of the expenditure; (c) as per the books maintained by the assessee, the amounts in question were advances and hence the expenses were liable to be treated as revenue expenditure; (d) abandonment of the project was with the knowledge of RBI. 2. In view of the above finding of fact, the argument that the investments were made towards the creation of capital assets of the joint venture cannot be accepted. Hence, the decision of the Tribunal in the facts of the present case cannot be faulted. The decision of the Tribunal does not give rise to any question of law. Accordingly, the appeal is dismissed with no order as to costs. (R.M. SAVANT, J.) (J.P. DEVADHAR, J.)