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2018 (12) TMI 48 - HC - Income TaxAllowable business expenditure u/s 37 - expenditure incurred by the appellant for purchasing laboratory equipments as per Government Order - Held that:- In the instant case, the amounts incurred by the assessee was for installation of equipments in the Government Laboratory to facilitate examination of the samples received by the laboratory, which also includes samples of the assessee. The assessee's business is thus benefited; but, at the same time, the assessee has no ownership over the equipments purchased and hence it is not a capital investment. That apart, for getting the samples examined by the laboratory, the assessee would need to pay examination fees as is required by any other agency which sends samples for examination. The findings of the AO to disallow the claim of revenue expenditure, upheld by the Appellate Authority and the Tribunal on the premise that the expenditure incurred will not be a revenue expenditure entitled for deduction, cannot be upheld. When the assessee has been conferred with a monopoly of dealing in liquor and testing of the same and ensuring its quality is expedient to its business and the money expended for providing the facilities to an independent government agency, without any acquisition by itself is a revenue expenditure - assessee is entitled to treat the expenses, incurred by them for upgrading of infrastructure in the government laboratory, as per the directions of the Government, which owns the Corporation, as revenue expenditure. - Decided in favour of assessee.
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