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2009 (1) TMI 274 - HC - Income TaxCapital versus Revenue Expenditure - ITAT allowed the the expenditure incurred by the assessee in connection with the modernization and expansion of, inter alia, its Deoband and Ramkola units by treating the same as expenditure of a revenue nature. – ITAT allowed the said expenditure although the assessee, in its books of accounts, had treated the same as capital expenditure. – tribunal had permitted deduction of administrative expenses incurred in the course of the renovation of the two units. – held that - as the new unit was part of the existing business and there was no dispute that there was unity of control and interlacing of the units, the expenses incurred by the assessee for the setting up of a new unit, would be of a revenue nature – The tribunal, in our view, has correctly concluded that the authorities below had erred in holding the said expenditure to be of a capital nature. We agree with the conclusion of the tribunal that the whole of the expenditure is to be allowed as revenue expenditure and consequently there would be no question of grant of depreciation on such expenditure.
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