TMI Blog1999 (7) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... on Research Inc., was admissible as a revenue expenditure ?" The assessee is a public sector undertaking and derives income for supply of technical know-how to various concerns in India and abroad. It also undertakes turn key projects in India and abroad. During the previous year, ended on March 31, 1972, and relevant to the assessment year 1972-73, the assessee paid Rs. 90,000 to Fractionisation Research Inc., as initial admission fee for its membership and claimed it as revenue expenditure. The said organisation is a co-operative research organisation and supplies to its members information concerning mathematical models which can be used for rational designing of vapour liquid contracting systems. While computing total income for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... organisation is revenue or capital in nature, for it has not been disputed by the Revenue that the payment was for the purposes of the assessee's business. The question whether an expenditure is capital or revenue in nature is a vexed question, because the line of demarcation between the two is very thin. It has not been possible to lay down any single or exhaustive test as infallible or any single criterion as decisive for determination of the question. However, attempts have been made from time to time to outline some broad factors to be taken into consideration to distinguish capital from revenue expenditure. One rough and ready test, which is usually being followed, is to try to ascertain whether a particular expenditure brings about "e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t cannot be said that on payment of initial membership fee, the assessee acquired an asset or an advantage for the "enduring benefit" of its business. The furnishing of periodical information by the said organisation to the assessee was directly dependent upon the assessee's paying annual subscription to them and not on the assessee being their member. In this view of the matter, we feel that the membership of the organisation did not per se bestow on the assessee any asset or advantage of enduring nature, which in the present case was the right to constantly receive the latest technical information from the aforesaid organisation, that may be found useful for improvement, expansion and diversification of its activities, so as to constitute ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
