Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2012 (4) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (4) TMI 237 - GUJARAT HIGH COURTCapital versus Revenue expenditure - AO noticed that assessee had claimed depreciation on such amount by treating it as capital expenditure in the books and still claimed it has revenue expenditure in the return of the income - the assessee contended that such payments were made to company who was engaged to take up project of profit improvement programme which helped the company in increasing sales, cost reduction and eventually would increase the profit and therefore, the expenditure was claimed as revenue expenditure – AO treated it as capital expenditure as auditors of the company had treated it - Held that :- Tribunal committed no error as no technical know-how for any new project was provided and thus the expenditure resulted only in improving income and efficiency of the business and hence to be treated as revenue expenditure - mere entries in account books would not decide the nature of expenditure. MAT - book profit under Section 115JB of the Act - Revenue vehemently contended that in view of provisions contained in Section 115JB of the Act and considering sub-section (7) of Section 94 of the Act inserted with effect from 1.4.2002, Tribunal erred in deleting disallowance of loss of 47.23 crores (rounded off) for the purpose of computation of book profit under Section 115JB of the Act. Counsel pointed out that such loss was suffered by the assessee on account of dividend stripping. To control which activities sub-section (7) of Section 94 of the Act was added. - held that:- Such provision cannot be applied while computing book profit for the purpose of Section 115JB of the Act. Book profit under Section 115JB of the Act has to be worked out as per the provisions made in the section, giving effect to explanation contained therein. Appeal admitted.
|