M/s. SITALPUR SUGAR WORKS LTD. vs COMMISSIONER OF INCOME-TAX, BIHAR AND ORISSA

The Supreme Court ruled that the expenditure incurred by the appellant company for dismantling and relocating its sugar factory was capital expenditure under Section 10(2)(vi) of the Indian Income-tax Act, 1922, and not deductible as a revenue expense. The Court emphasized that such expenses are aimed at creating a lasting benefit for the business and do not qualify for depreciation since no tangible asset was acquired. The appeal was dismissed, affirming the High Court's decision that the expenses did not warrant a deduction for income-tax purposes.