TMI Blog2014 (3) TMI 470X X X X Extracts X X X X X X X X Extracts X X X X ..... ase has to be decided on its own facts, keeping in mind the broad picture of the whole operation in respect of which the expenditure has been incurred - But a few tests formulated by the Courts may be referred to as they might help to arrive at a correct decision of the controversy between the parties. If the advantage consists merely in facilitating the assessee’s trading operations or enabling the management and conduct of the assessee’s business to be carried on more efficiently or more profitably while leaving the fixed capital untouched, the expenditure would be on revenue account, even though the advantage may endure for an indefinite future - the amount paid to the Trust was for the use of the court yard under the MOU for an indef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dmitted in the SC as SLP – thus, the assessee is entitled for the deduction by the time final judgement does not came – Decided against Revenue. - ITA No.529/2007 - - - Dated:- 31-1-2014 - Dilip B Bhosale And B Manohar, JJ. For the Appellant : Sri K V Aravind, Adv. For the Respondents : Sri Roopesh Jain, Adv. M/s Anandramaprashanth And Vikram JUDGEMENT :- PER : B Bhosale This income tax appeal is against the order dated 12.2.2007 rendered by the Income Tax Appellate Tribunal, Bangalore Bench 'A (for short 'the Tribunal ) in ITA No.365/Bang/2005, pertaining to the assessment year 1998-99, whereby the Tribunal allowed the appeal in part to the extent indicated therein. The appeal before the Tribunal was dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business is a revenue expenditure allowable under section 37 of the Act and not a capital expenditure as held by the assessing officer. 2. Whether the Tribunal was correct in holding that for the purpose of computation of deduction under Section 80IA of the Act income from foreign exchange fluctuations, income from insurance claim, interest on KEB deposits, income from scrap sales, should be treated as profits and gains of an industrial undertaking. 3. Whether the Tribunal was correct in holding that deduction under section 80HHD of the Act cannot be allowed on the entire business as a whole as computed by the assessing officer but in respect of each eligible unit. 5. By consent and with the assistance of learned counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the case of EMPIRE JUTE CO. LTD. -vs- COMMISSIONER OF INCOME TAX (1980) 124 ITR 1 (SC), in support of their contentions. Mr.Aravind, learned counsel for the Revenue tried to distinguish the ratio laid down by the Supreme Court in this case on the basis of factual matrix involved therein. As against this, learned counsel appearing for the respondent/assessee placed reliance upon the principle laid down by the Supreme Court in the said judgment. 8. We have perused the judgment. We find ourselves in agreement with the learned counsel appearing for the respondent/assessee. It would be relevant to reproduce the relevant observation made by the Supreme Court, in the said judgment, which, in our opinion, support the case of the respondent/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vs. Nchanga Consolidated Copper Mines Ltd. (1965) 58 ITR 241 (PC) : TC16R.991, it would be misleading to suppose that in all cases, securing a benefit for the business would be, prima facie, capital expenditure so long as the benefit is not so transitory as to have no endurance at all . There may be cases where expenditure, even if incurred for obtaining advantage of enduring benefit, may, none the less, be on revenue account and the test of enduring benefit may break down. It is not every advantage of enduring nature acquired by an assessee that brings the case within the principle laid down in this test. What is material to consider is the nature of the advantage in a commercial sense and it is only where the advantage is in the capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se, consists merely in facilitating the assessee s business operations, enabling the management to conduct their Hotel business more efficiently and profitably. We are, therefore, satisfied that the view taken by the Tribunal in answering this question in favour of Assessee and against the Revenue is correct and deserve no interference by this Court. 10. Insofar as the second question is concerned, Mr.Aravind, learned counsel appearing for the appellant/Revenue, at the outset invited our attention to the judgments of the Supreme Court in LIBERTY INDIA Vs COMMISSIONER OF INCOME-TAX reported in [2009] 317 ITR 218 (SC) and in PANDIAN CHEMICALS LTD. -vs- CIT reported in [2003] 262 ITR 278 (SC) and submitted that the question is squarely cove ..... X X X X Extracts X X X X X X X X Extracts X X X X
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