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2023 (4) TMI 468 - AT - Income TaxNature of expenditure - revenue or capital expenditure - Amount deposited by assessee to department of mines for taking contract of royalty recovery HELD THAT:- Assessee submitted the copy of the challans paid to the mining department. The head under which the money paid is neither refundable to the assessee nor adjustable against the future receipt to the assessee. Even the mining department has confirmed the receipt of the payment challan by the assessee and this information was collected by the AO u/s. 133(6). CIT(A) has contended that the expenditure incurred by the assessee is capital expenditure. The observation so arrived is without any basis or reasoning by the CIT(A). The term capital expenditures are typically one-time large purchases of fixed assets that will be used for revenue generation over a longer period or expenditure incurred for enduring benefit to the assessee. Whereas Revenue expenditures are typically referred to as ongoing operating expenses, which are short-term expenses that are used in running the daily business operations. Thus, based on these basic difference of expenditure and on careful examination of the challans placed on record we are of the considered view that the expenditure incurred by the assessee are not in nature of any enduring benefit to the assessee but in fact days to day routine expenditure in the nature of revenue expenditure - we vacate the addition - Decided in favour of assessee.
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