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2012 (10) TMI 59 - HC - Income TaxRevenue expenditure versus capital expenditure - hire-purchase v/s agreement of lease - Held that:- There is a lot of difference between the purchase, hire-purchase and lease agreement. In this case the terms indicate that the provider of the machines was required to maintain the machines and, therefore, he was entitled to take the rent also as per the terms of the agreement, and the petitioner, in the any relevant year could not have exercised his right to purchase the Air Conditioner, his right to purchase the Air Conditioner could have been exercised after expiry of certain period of time. Therefore, in that situation, there was an agreement for lease only - in favour of assessee. Revenue expenditure v/s capital capital expenditure - Held that:- the fee paid to the Architect, some expenses incurred on old capital work in progress which was abandoned and cost of damaged cabinets it is not in dispute that the project could not be accomplished because of the reason that the place where it was to be undertaken had a poor quality of soil and all the construction already damaged. - The other articles bought by the assessee also got damaged and, therefore, in that fact situation, the Tribunal was fully justified in holding that such expenditure which may be pre-operational expenditure for a project can be treated to be a revenue expenditure actually and not a capital expenditure - in favour of assessee.
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