Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2014 (6) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (6) TMI 80 - HC - Income TaxDeduction u/s 37 of the Act – Expenses on premises taken on lease towards repairs, fixtures etc. – assessee was compulsorily required to build a new shop on land which was not his own property - Held that:- The nature of business prior to expenditure in question and afterwards being the same without any change, except some improvements to augment more profits in order to compete with the other competitors in the business regarding new interior designs etc. it cannot be termed as capital expenditure - There was no fresh venture by the assessee so far as the business is concerned - Intended object and the effect must be with reference to business realities - Whether advantage or benefit is for a shorter or longer period, it is immaterial - character of expenditure is alone the deciding factor – thus, the stand of the revenue that the Tribunal was justified in rejecting the claim of the assessees has to be rejected - the business expenditure irrespective of creating enduring benefit or advantage even if it is a profit earning effort unless at the end of the term of lease the items on which expenditure was spent could be retrieved by the appellants-assessees, it shall not amount to capital expenditure but it can be termed only as revenue expenditure. Transfer pricing adjustment – Held that:- There is no justification for the revenue to ignore certain comparable cases only on the ground that those two assessees sustained losses in some years - In comparable cases produced by the assessee with respect of international transactions, the revenue has to bear in mind the case of the assessees based on the computations made in the comparable cases – Decided in favour of Assessee.
|