TMI Blog2018 (9) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... n DEPB is sold by a person, his profit on transfer thereof less its face value would represent the cost of the said instrument and not the entire sum received by him. Nature of expenditure - whether expenditure for laying down power evacuation line to connect the assessee’s plant to the grid belonging to the State Electricity Board would constitute revenue expenditure or capital expenditure? - Held that:- In CIT –vs- Gujarat Mineral Development Corporation (1997 (9) TMI 101 - SUPREME COURT) it was held that amount paid to Electricity Board for laying electric cables and electric supply transmission lines etc. for assessee’s benefication plant for separating waste material from useful material was held to be of revenue expenditure. In Na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfer thereof less its face value would represent the cost of the said instrument and not the entire sum received by him. It has been held in this decision:- We may now point out the errors in the impugned judgment of the High Court. The first reason given by the High Court is that cl. (iiia) of s. 28 treats profits on the sale of an import license as income chargeable to tax and when the license is sold, the entire amount is treated as profits of business under cl. (iiia) of s. 28 and thus there is no justification to treat the amount which is received by an exporter on the transfer of the DEPB and differently than the profits which are made on the sale of an import license under cl. (iiia) of s. 28 of the Act. In taking the view tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e amount that he receives in excess of the DEPB which represents his profits on transfer of the DEPB. The High Court has sought to meet the argument of double taxation made on behalf of the assessees by holding that where the face value of the DEPB was offered to tax in the year in which the credit accrued to the asessee as business profits, then any further profit arising on transfer of DEPB would be taxed as profits of business under s.28(iiid) in the year in which the transfer of DEPB took place. This view of the High Court, in our considered opinion, is contrary to the language of s. 28 of the Act under which cash assistance received or receivable by any person against exports such as the DEPB and profit on transfer of the DEPB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt urged by Mr. Ghoshal is on the question as to whether expenditure for laying down power evacuation line to connect the assessee s plant to the grid belonging to the State Electricity Board would constitute revenue expenditure or capital expenditure. Mr. Ghoshal s submission is that the same would constitute capital expenditure whereas the assessee claimed full deduction for such expenditure treating the same as revenue expenditure. The Tribunal held on this issue:- 51.Gr.No.5 raised by the revenue reads as follows: 5. Whether on the facts and in the circumstances of the case in law, the Ld.CIT(A) was justified in allowing the expenditure on construction of evacuation line of the SEB for transmission of power produced by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ower generated by the Assessee through the power grid owned by the SEB. The expenditure in question was incurred for smooth and efficient running of business. The expenditure incurred did not result in any benefit of enduring nature. It has been held by the Hon ble Apex Court in Empire Jute Co. Ltd. vs.- CIT ITA (1980) 124 ITR 1 (SC), that 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 any indefinite future. The test of enduring benefit is, therefore, not cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. (2010)322 ITR 478 (Raj.) - CIT -vs- Coats Viyella India Ltd. (2002)253 ITR 667 (Mad.) - CIT vs- Excel Industries Ltd. (1980) 122 ITR 995 (Born.) 54. In view of the aforesaid decisions rendered on the issue by the various Courts, we are of the view that there is no merit in Gr.No.5 raised by the revenue and the same is dismissed. The decision of the Tribunal thus reflects the view expressed by the coordinate Bench of this Court in the case of BIRLA JUTE MANUFACTURING CO. LTD .(supra) relied upon in the Tribunal s decision. We do not find any reason to take a contrary view in this appeal. In our opinion, there is no error of law committed by the Tribunal incoming to its finding as it has done on this p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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