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2006 (1) TMI 64 - HC - Income TaxCapital or revenue expenditure - Assessing Officer while completing the assessment, made the following disallowances/additions: (i) disallowance of telex rent, telephone rent, postal franking machine rent, rates and taxes (ii) disallowance of the prepaid expenditure (iii) computer software and hardware upgradation expenses was treated as capital expenditure, and (iv) addition under section 41(1) - What is capital expenditure and what is revenue are not eternal verities but must needs be flexible so as to respond to the changing economic realities of business. The expression 'asset or advantage of an enduring nature' was evolved to emphasise the element of a sufficient degree of durability appropriate to the context - held that the phrase "enduring benefit" is not thinking of advantages that are permanent. There is a difference between the lasting and the everlasting – expenditure incurred by the assessee has, therefore, to be treated as revenue expenditure - revenue appeal dismissed
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