TMI Blog2014 (8) TMI 728X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the business with a view to produce the benefits to the assessee - it cannot be treated as capital asset – Decided against Revenue. Nature of fee received – Capital or revenue - Expenses incurred on ISO certification – Held that:- Following the decision in Empire Jute Co. Limited vs. CIT [1980 (5) TMI 1 - SUPREME Court] - the expenses incurred on ISO 9002 Certificate is revenue in nature – Decided against Revenue. - ITA No. 151 of 2005 - - - Dated:- 8-7-2014 - Ajay Kumar Mittal And Jaspal Singh,JJ. For the Appellant : Mr. Rajesh Katoch, Advocate For the Respondent : Mr. S. K. Mukhi, Advocate ORDER Ajay Kumar Mittal, J. 1. This appeal has been filed by the revenue under Section 260A of the Income Tax Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocessed under Section 143(1)(a) of the Act on 31.3.1998. Subsequently, the return was revised on 23.3.1999 claiming unabsorbed depreciation and the same was filed at an income of ₹ 75,17,109/-. The Assessing Officer vide order dated 18.1.2000 (Annexure A-1) assessed the income at ₹ 87,27,344/-. Feeling aggrieved, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [for brevity the CIT(A) ]. The CIT (A) vide order dated 19.10.2000 (Annexure A-II) partly allowed the appeal. Still dissatisfied, the assessee filed an appeal before the Tribunal who vide order dated 11.10.2004 (Annexure A-III) partly allowed the appeal. Hence, the present appeal by the revenue. 3. Learned counsel for the revenue submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel for the parties, we do not find any merit in this appeal. 6. Adverting to first question relating to nature of one time expenditure incurred for the Club Membership fee, the Full Bench of this Court in M/s Groz Beckert Asia Limited's case (supra) had held that the corporate membership which was obtained for running the business with a view to produce profit would amount to revenue expenditure. It was also noticed that such an expenditure does not bring into existence an asset or an advantage for the enduring benefit of a trade. It was recorded as under:- 16. In the present case, the nature of the expenditure incurred by the assessee cannot be said to be a capital expenditure. The second test culled down in Assam Bengal Cem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rding expenditure incurred on account of expenses for ISO 9002 certificate was held to be revenue expenditure by this Court in Commissioner of Income Tax I, Ludhiana vs. M/s Varinder Agro Chemicals Limited, 85, Industrial Area 'A', Ludhiana, ITA No.424 of 2005, decided on 22.12.2006 relying upon judgments of the Apex Court in Empire Jute Co. Limited vs. CIT (1980) 124 ITR 1 and Commissioner of Income Tax, Bombay City I vs. Associated Dement Companies Limited, (1988) 172 ITR 257. Accordingly, question No.(ii) is also answered against the revenue. 9. As regards question No.(iii), as noticed above, the matter has been remanded to the Assessing Officer to adjudicate the assessee's claim on merits in accordance with law. In view o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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