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2022 (8) TMI 682 - AT - Income TaxNature of expenses - Litigation expenses - payment was made to perfect a title or for getting rid of defect in the title or against the threat of litigation - revenue or capital expenditure - CIT(A) has treated the expenditure as capital expenditure for the reason that the details of expenses have not been furnished, the nature of expenditure is different from the earlier years and the outcome of litigation & its present status is not known - HELD THAT:- Expenditure has been incurred not to acquire or improve or extend or possession or removing defect in the title of fixed assets in as much as assessee was not the owner of such asset - When litigation expenditure is incurred to protect the business, the same is revenue expenditure. In the present facts, since assessee has no interest in the ownership of the asset but he is in possession of the asset for conducting its business, the litigation expenditure incurred is only to protect his business and, therefore, the same is revenue expenditure. Accordingly, the litigation expenditure incurred by the assessee is revenue expenditure and not capital expenditure. Hence we allow the expenditure incurred as revenue expenditure. Interest on refund as per section 244A - HELD THAT:- Refund was granted to the assessee on 11.06.2020. The ld. A/R submitted that as per section 244A where refund of any amount becomes due to the assessee, he is entitled to receive simple interest thereon from 1st day of April, of the assessment year to the date on which refund is granted. Simply calculating the interest till the month on which intimation under section 143(1) is issued do not amount to grant of refund. Refund is granted when the amount is actually paid to the assessee. In the case of the assessee, the refund was actually paid to the assessee on 11.06.2020. Therefore, the assessee is eligible for interest under section 244A from April, 2018 to June, 2020 i.e. for 27 months and not from April, 2018 to November, 2019 i.e. 20 months - we direct the AO to allow interest to the assessee upto the actual date of refund i.e. upto 11.06.2020. The matter is restored to the file of the AO.
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