IN THE HIGH COURT OF DELHI AT NEW DELHI 
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 9. 
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  ITA 909/2010  
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 COMMISSIONER OF INCOME TAX                          ..... Appellant 
 Through:        Mr. N.P. Sahni, Adv. 
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 versus 
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 DELHI STATE CIVIL SUPPLIERS CORP LTD         ..... Respondent 
 Through:       None 
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 CORAM: 
 HON'BLE THE CHIEF JUSTICE 
 HON'BLE MR. JUSTICE MANMOHAN 
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 O R D E R 
                               23.07.2010 
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 The present appeal preferred under Section 260A of the Income Tax Act, 
 1961 (for brevity ?the Act?) is directed against the order dated 25.3.2009 
 passed by the Income Tax Appellate Tribunal (for short ?the tribunal?) in ITA 
 No. 2778/DEL/06 pertaining to assessment year 2003-04. 
 The singular question that arises for consideration in this appeal is 
 whether the tribunal was justified in allowing the deduction that was claimed by 
 the assessee towards revenue expenditure on the foundation that he has spent 
 Rs.95.3 lacs because of a notification issued by the Government to collect 
 Rs.5/- on sale of bottle of country made liquor.  The tribunal in paragraph 7 
 has held thus: 
 ITA 909/2010 
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 ?7.       We have duly considered the rival contentions and gone through the 
 record carefully.  The business of assessee is not to construct the flyover and 
 pedestrian path.  Its business is sale of country made as well as IMFL liquor in 
 the national capital territory of Delhi.  For this purpose it is required to 
 take a license from the Govt. of Delhi.  The Govt. has directed the assessee to 
 collect Rs.5/- on sale of per bottle of country made liquor.  Thus its licence 
 is subject to the conditions imposed by the Govt.  In a way collection of Rs.5/- 
 on each bottle of country made liquor sold by the assessee is a levy which is 
 direct related to its business.  The amount of Rs.95.3 lac collected by the 
 assessee is by virtue of the Govt.?s notification and has been collected in the 
 shape of levy.  This is altogether immaterial for the assessee as to how this 
 amount will be incurred by the Delhi Govt.  As far as contention of the Ld. DR 
 that this amount will be incurred on construction of flyover and pedestrian 
 path.  Therefore, had to be treated as a capital in nature is concerned we are 
 of the opinion that assessee is not required to construct such facilities. 
 Therefore facts are quite distinguishable on this aspect.  In the case of 
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 DTandTDC this argument was raised but that was rejected by the Tribunal.  There 
 also the amount collected as per the Govt. notification was carved out 
 separately and was claimed as a deduction for running the business of sale of 
 liquor.  The tribunal held that expenses is of revenue in nature but it will be 
 allowed to the assessee as and when such expenses was actually incurred on 
 construction of the infrastructure facilities in the shape of flyovers and 
 pedestrian path.  In the present case this expenses is an essential element for 
 running its business.  The AO himself did not disallow the expenses even in a 
 scrutiny assessment in asstt. year 2001-02 and 2002-03.  Similarly disallowance 
 was made in 2004-05 stands deleted by the CIT(A) and the order has been upheld 
 by the Tribunal.  Taking into consideration all these aspects we do not find any 
 merit in this appeal.  It is dismissed.? 
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 In our considered opinion, the decision of the tribunal is absolutely 
 impeccable in view of the fact that the concept of capital expenditure does not 
 attract to a case of this nature. 
 In the result, the appeal, being devoid of merit, stands dismissed in 
 limine. 
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 CHIEF JUSTICE 
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 MANMOHAN, J 
 JULY 23, 2010 
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 ITA 909/2010 
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