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2015 (7) TMI 996 - HC - Income TaxDevelopment charges - revenue v/s capital expenditure - Held that:- The Court is satisfied with the explanation offered by the Assessee that it is incurring development charges on research and testing of components and that this does not result in a benefit to it of an enduring nature so as to characterise the development charges as capital expenditure. The Court is of the view that testing of products and components is essentially a continuous process which permeates different accounting years. It is an integral part of a routine manufacturing and monitoring activity. It cannot obviously be a one-time event. The Revenue has not been able to persuade the Court that an error has been committed in any of the previous AYs where the Assessee's explanation was accepted and the expenditure on development charges was treated as revenue expenditure. In the facts and circumstances of the case, the Court is additionally persuaded to adopt the rule of consistency as explained in Radhasoami Satsang v. CIT (1991 (11) TMI 2 - SUPREME Court ) and decline the plea of the Revenue to remand the matter to the AO for a fresh determination. - Decided in favour of assessee.
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