TMI Blog1985 (1) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... penditure has been incurred over a number of years by the assessee and was shown by the assessee in its books as development expenditure relating to each contract and was written off over the period of years covering the contract. The assessee had also incurred expenditure relevant to the assessment years 1970-71 to 1972-73 with regard to the consultancy services it had obtained from the National Productivity Council, Administrative Staff College and the Engineering Management and Foundry Consultants, Bangalore. In the assessment year 1970-71, it had incurred an expenditure of Rs. 93,377 by way of payment made to the National Productivity Council for obtaining advice for improving the manufacturing process in machinery tools accessory divis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ancy service, it paid Rs. 13,737 to the Engineering Management and Foundry Consultants, Bangalore. Now, the assessee has claimed these items of expenditure as revenue expenditure deductible under section 37 of the Income-tax Act during the relevant years. The Income-tax Officer has rejected the claim and held the expenditure to be capital expenditure and, therefore, not deductible. In the appeals preferred by the assessee against that decision, the Appellate Assistant Commissioner agreed with the contention of the assessee and held the expenditure to be revenue expenditure. With that view of the Appellate Assistant Commissioner the Tribunal had concurred and at the instance of the Revenue, the above two questions have been referred for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l was paid for the benefit of increasing the manufacturing efficiency and formulating incentive schemes. In an age of speedy technological progress, no degree of permanency can be attached to these opinions given by the firms like the National Productivity Council on how to increase the production. They are all susceptible to modifications and alterations. For that reason, we cannot hold that the fee paid to the National Productivity Council should be regarded as an expenditure incurred for acquiring a capital asset. So is the case with the amounts paid to the Administrative Staff College and so is the case with the amounts paid to the Engineering Management and Foundry Consultants of Bangalore. In fact, on the basis of the statement of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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