Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2022 (7) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (7) TMI 901 - HC - Income TaxNature of expenditure - revenue or capital expenditure - sum paid for termination of Hotel Operator Agreement - HELD THAT:- There has been no addition of capital asset of enduring nature in the hands of the respondent-assessee. In fact, after payment of Rs.30.86 crores there has been no change in the capital structure of the respondent-assessee. It had paid Rs.30.86 crores to get back the possession of its own asset which had been given on license basis under the Hotel Operator Agreement. The Assessee has not acquired something that it did not already own or possess. This Court is of the view that the respondent-assessee spent Rs.30.86 crores to facilitate its business and trading operations. Accordingly, the test of capital expenditure as stipulated in Empire Jute Co. Ltd.1980 (5) TMI 1 - SUPREME COURT], MADRAS AUTO SERVICE PVT. LIMITED [1998 (8) TMI 1 - SUPREME COURT], ASSOCIATED CEMENT COMPANIES LIMITED [1988 (5) TMI 2 - SUPREME COURT], BHARAT ALUMINIUM COMPANY LTD. [2010 (8) TMI 26 - DELHI HIGH COURT] AND HINDUSTAN TIMES LIMITED VERSUS COMMISSIONER OF INCOME-TAX, NEW DELHI [1979 (11) TMI 86 - DELHI HIGH COURT] is not satisfied in the present case. Consequently, this Court is of the view that the compensation paid had arisen out of business necessity and is revenue expenditure. Accordingly, no substantial question of law arises for consideration in the present appeal and the same is dismissed.
|