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2013 (12) TMI 955 - AT - Income TaxWhether consultancy charges and travelling expenses are capital in nature - Held that:- The assessee has paid consulatncy fee for rendering services of fleet management service and providing security products and networking solution - The payment made under consultancy agreement has to be allowed as revenue expenditure when the genuineness of the payment has not been doubted - The assessee has started a new line of business in the service industries - Such an expenditure has to be allowed as revenue and cannot be held as capital expenditure or can be capitalized in the books of account - Following Empire Jute Co. Ltd. v. CIT [1980 (5) TMI 1 - SUPREME Court] - If there is continuity of business with common management and fund, then even if the assessee has started a new line of business in this year, the payment made for carrying out such running of new business, is nothing but a business expenditure which has to be allowed in the year in which it has been incurred - There is no augmentation of asset to the assessee but has helped the assessee to develop a proper guidance for running the new line of service industries - Decided in favour of assessee.
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