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2016 (8) TMI 229 - HC - Income TaxExpenses incurred in maintaining the Thiruvalluvar statue - enduring benefit - revenue or capital expenditure - Held that:- Asset Thiruvalluvar statue is not owned by the Tamil Nadu Tourism Development Corporation Ltd. Corporation has been entrusted with the only work of maintenance of the statue from out of the contribution made by Poompuhar Shippping Corporation. Business of the Corporation is tourism. Though Mr.M.Swaminathan, learned counsel for the appellant submitted that the Tribunal went wrong in adjudging the issue, with reference to the ownership of the statue and should have confined itself only to the issue as to whether, the expenditure incurred is capital or revenue, in the light of the judgments extracted supra, as to how ownership or acquisition of capital asset, but the expenditure incurred, has a bearing on the decision, as to whether the expenditure is capital or revenue, submissions to the contra, cannot be countenanced. Maintenance of the statue, may endure some benefit towards the conduct of the assessee's business, but the expenditure incurred cannot, at any rate, to be said as an advantage to the assessee in its capital field and thus the expenditure would be capital in nature, so as to disallow the expenditure incurred for maintenance of Thiruvalluvar statue by security charges, electricity charges, establishment charges and expenses for providing protective coating with poly silicon to the statue. Tribunal was right in holding that the expenses incurred by the assessee in maintaining the Thiruvalluvar statue is revenue in nature on the ground that the statue did not belong to the assessee - Decided against revenue Receipt of grants - revenue or capital - Held that:- When the details of the grant, clarificatory letters dated 22.06.2002 of the Commissioner of Tourism, Chennai and 04.12.2008 of the Ministry of Tourism, Government of India, respectively, produced before the Appellate Authority, have been considered as to how the expenses towards security charges, electricity charges, establishment charges and expenses for providing protective coating with poly silicon to the statue have been incurred and when the assessee, by producing the letter dated 04.12.2008, had convincingly explained as to how the grant has been made for specific purposes, some of which were dropped, and the obligation of the state government to return within six months and when the assessee has offered a reasonable explanation, both the Appellate Authority and Tribunal, have rightly held that the expenditure from the grant was capital in nature. When the grants were to be utilised for a capital asset, but some of the projects, dropped, receipts should be treated only as capital in nature. Reasoning of the Tribunal, on the issue as to whether the expenditure incurred from the grant is capital receipt or revenue is convincing. On both the issues discussed supra, finding recorded are concurrent with reasons. Revenue has not made out a case for answering the substantial questions of law raised in its favour.- Decided against revenue
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