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2017 (9) TMI 733 - BOMBAY HIGH COURTDepreciation on boiler leased by the assessee - AO termed this as a colourable device to avoid tax - Held that:- It cannot be said that the assessee bought and leased back the asset to M/s. Bombay Dyeing solely for the purpose of avoiding tax. The assessee is earning rental income from the transaction which was subjected to tax. If it was not a bona fide business transaction, the assessee, after claiming benefit of depreciation in one year, could not have subjected itself to tax on the income arising from that very transaction. This was taken by the Tribunal to be an important feature of the transaction and the matter as a whole. It is in these circumstances, and looking at the issue in an overall manner, that the Tribunal held that the transaction cannot be termed as dubious or colourable device, but a genuine business transaction. - In arriving at the conclusion that the transaction was genuine, therefore, the Tribunal has not misdirected itself, nor its conclusion can be termed as perverse. Technical know how fees - allowable revenue expenditure - whether expenses resulted in bringing into production of new types of machines and know how was to become the property of the assessee which clearly amounts to capital expenditure? - Held that:- The Tribunal has found in this case that the Assessing Officer was in error in holding that the expenditure was not a revenue expenditure. - the assessee was already in possession of the technology which required updation. The updated technology was mainly aimed at reduction and control of heat requirement, upgrading of existing equipment and general cost production. - in this age of vast advancing technology, it is difficult to hold that the technology acquired by the assessee would be enduring. No new asset is required by the assessee. - To be allowed as revenue expenditure. Revenue appeal dismissed.
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