Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2010 (8) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2010 (8) TMI 689 - HC - Income TaxCapital expenditure or revenue expenditure - Deferment of revenue expenditure - Expenses incurred by the assessee on the replacement of membranes is a revenue expenditure or deferred revenue expenditure. - Held that:- The assessing authority, the Commissioner of Income-tax (Appeals) as well as the Tribunal held that the expenditure was in the nature of capital expenditure, having regard to the fact that the item in question, i.e., membrane had life of three years and eight years. The item in question is an equipment without which manufacturing is not possible. It is not an expenditure of the nature which is exhausted immediately. There is no single or rigid test for holding an expenditure to be revenue or capital. Generally enduring benefit of an expense, i.e., trade test or new asset test or functional test may be employed for determining the expenditure to be capital or revenue depending upon the nature of the business carried and the nature of expenditure incurred. In the facts and circumstances of the case, the nature of expenditure cannot be held to be of revenue nature. - Decided against Assessee.
|