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2014 (9) TMI 832 - HC - Income TaxClassification of expenses - Whether the Tribunal was justified in deleting the disallowance of expenditure claimed by the assessee, without appreciating that the expenditure was necessitated due to the coming into existence of the new entity – Held that:- payment to financial consultants for professional services in connection with the corporation debt restructuring by negotiating with Banks and Financial Institutions - Such expenditure was considered for the purpose of business and allowable in entirety in the year in which it was incurred and it was held to be revenue in nature and not capital - Following the decision in Madras Industrial Investment Corporation Limited v. CIT, [1997 (4) TMI 5 - SUPREME Court] - considering the principle of commercial trading, when the question is to be addressed, both the CIT(A) as well as the Tribunal rightly held it to be revenue in nature and the same cannot be said to be capital - It is quite apparent that the fees paid for support for LAN work; providing and upgradation of Internet Bandwidth, or for coordination with BSNL for internet connectivity, etc are not having any enduring benefit - If any consultancy is required for the said purpose, the amount clearly would come under the head of Consultancy and that surely could not be considered as capital in nature - the expenditure made was at the best for continuing the benefit for one year - such payment cannot be categorized as capital in nature as no asset is brought into existence on account of such payment –Decided against revenue.
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