TMI Blog1992 (7) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... erived benefit of the project report in the years to come and, therefore, the payment was capital in nature. Consequently, he disallowed the claim and added that to the total income. 15. On appeal, the CIT(A) considered the various facets of the project report and the services rendered by M/s. Multiproducts. As per letter dated 4-2-1984 M/s. Multiproducts had agreed to take up the project for market survey, consultation and advice for the assessee's gas agency and the charge fixed for was Rs. 50,000 for the total jobs. The scope of the work undertaken as per the report is as under :--- (1) Improve customer relation (2) Improve customer services (3) Suggest modem working methods to achieve the above goal (4) To establish MIS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r management consultancy, selecting of personnel, streamlining of office work of Gas Agency etc. by devising of cash flow, work chart and customer satisfaction survey and suggestions arising of responsibility etc. for official working Rs. 25,000 ; and (iii) proposals for diversification new project facility on Pharmaceutical formulation Rs. 5,000. According to him, the expenditure relating to item No. (ii) amounting to Rs. 25,000 alone is attributable to the Gas Agency business, while the expenditure relating to item Nos. (i) (iii) relate to new line of business and, therefore, the nature of expenditure is capital and not revenue. Therefore, he supported the order of the ITO with respect to expenditure in item Nos. (i) (iii). 17. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for increasing the manufacturing efficiency and formulating incentive schemes. It was held by the Andhra Pradesh High Court that the expenditure was not incurred for acquiring asset of enduring nature but allowable as deduction. At page 284 of the report, it has been observed that the amount paid to National Productivity Council was paid for the benefit of increasing the manufacturing efficiency and formulating incentive schemes. In an age of speedy technological progress, no degree of permanency can be attached to these opinions given by the firms like the National Productivity Council on how to increase the production. They are all susceptible to modifications and alterations. Therefore, the fee paid to National Productivity Council was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng new connection thereafter. Therefore, no additional income other than the commission on Cylinder delivery with prevailing commission of Rs. 3.62 per Cylinder delivery maximum income will not exceed Rs. 19,720 per month. Therefore, it was suggested that the ideal time for gas distributor to diversify is on the later part of the second year of operation. Therefore, it was suggested the project of Intravenous Transfusion solution would be economically viable and for this purpose, they enclosed the study report procured from M/s Core Consultants. Therefore, a perusal of the entire consultancy report including suggestion for future diversification shows that the entire fees paid to M/s. Multiproducts pertained to the Gas Agency business carri ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
