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“capital expenditure”

Business ExpensesSection 37Section 373,515 judgments

The decision most relied on for capital expenditure is Empire Jute Co. Ltd. v. CIT (124 ITR 1), cited in 622 judgments on BharatTax.

Leading authorities on capital expenditure

Empire Jute Co. Ltd. v. CIT
124 ITR 1 · 1980 · Supreme Court
622
citing judgments

Expenditure is classified as revenue or capital based on its practical business effect, necessity, or expediency, rather than solely on the juristic classification of rights; an enduring benefit does not automatically make an expenditure capital if it facilitates trading operations or business efficiency.

Tuticorin Alkali Chemicals & Fertilizers Ltd. v. CIT
227 ITR 172 · 1997 · Supreme Court
621
citing judgments

Interest income earned on deposits, particularly before the commencement of business operations or as a requirement for business licensing, is taxable as "income from other sources" under Section 56, and cannot be treated as business income or set off against interest on borrowed funds.

Madras Industrial Investment Corporation Ltd. v. CIT
225 ITR 802 · 1997 · Supreme Court
568
citing judgments

Expenditure that provides an enduring benefit should be amortized over its useful life, not allowed as a deduction in a single year, to prevent a distorted picture of profits. Specifically, premium paid on debentures for their issue should be amortized on a straight-line method over the life of the debentures.

South Indian Bank Ltd. v. CIT
438 ITR 1 · 2021 · Supreme Court
508
citing judgments

The mixed fund theory is affirmed, holding that no disallowance of interest expenditure under Section 14A can be made if the assessee possesses sufficient non-interest bearing funds, such as capital and reserves, to cover investments made in tax-free securities.

CIT v. Institute of Banking Personnel Selection
264 ITR 110 · 2003 · High Court
398
citing judgments

Depreciation is allowable on assets for which the cost has been fully allowed as an application of income under Section 11 in previous years, when computing the income of a charitable trust. Charitable trusts are also entitled to carry forward their deficit.

Taparia Tools Ltd. v. JCIT
372 ITR 605 · 2015 · Supreme Court
343
citing judgments

An expenditure does not automatically become capital in nature merely because it results in some enduring benefit for the assessee; it can be treated as revenue expenditure if incurred for genuine business purposes.

Biocon Ltd. v. DCIT
35 Taxmann.com 335 · 2013 · ITAT
322
citing judgments

The discount arising from the grant of Employee Stock Option Plans (ESOPs) is an allowable business expenditure under Section 37(1) of the Income-tax Act, 1961, as it is an ascertained liability, not a contingent one, and constitutes a revenue expense rather than a capital expense.

Alembic Chemical Works Co. Ltd. v. CIT
177 ITR 377 · 1989 · Supreme Court
275
citing judgments

Expenditure that provides a commercial advantage of an enduring nature may still be classified as revenue expenditure if its purpose is to facilitate existing trading operations, improve business efficiency, or upgrade existing products, depending on the specific context and objective.

Judgments citing capital expenditure

JCIT (OSD)- 10(2)(2), Mumbai vs. Bayer Cropscience Ltd (Sucessor to Monsanto India Limited, Mumbai

In the result, the appeal by the assessee is partly allowed

ITA 2124/MUM/2018[2012-13]Status: DisposedITAT Mumbai10 Nov 2023AY 2012-13

Bench: Shri Om Prakash Kant & Shri Sandeep Singh Karhail

For Appellant: Shri Nitesh JoshiFor Respondent: Ms. Riddhi Mishra
Section 10(1)Section 115JSection 142(1)Section 143(2)Section 250

revenue expenditure without considering the fact that it has enduring benefit to the assessee company for a long period and should be treated as capital expenditure. 6) The appellant prays that the order of the CIT(Appeals) on the above grounds be set aside and that of the Assessing Officer ... says that any expenditure (not being expenditure of the nature described in sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee), laid out or expended wholly and exclusively for the purposes of the business or profession shall be allowed

Bayer Cropscience Ltd (Sucessor to Monsanto India Limited Mil), Mumbai vs. DCIT RG- 10(2)(2), Mumbai

In the result, the appeal by the assessee is partly allowed

ITA 3763/MUM/2015[2009-10]Status: DisposedITAT Mumbai10 Nov 2023AY 2009-10

Bench: Shri Om Prakash Kant & Shri Sandeep Singh Karhail

For Appellant: Shri Nitesh JoshiFor Respondent: Ms. Riddhi Mishra
Section 10(1)Section 115JSection 142(1)Section 143(2)Section 250

revenue expenditure without considering the fact that it has enduring benefit to the assessee company for a long period and should be treated as capital expenditure. 6) The appellant prays that the order of the CIT(Appeals) on the above grounds be set aside and that of the Assessing Officer ... says that any expenditure (not being expenditure of the nature described in sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee), laid out or expended wholly and exclusively for the purposes of the business or profession shall be allowed

Tata Chemicals Ltd, Mumbai vs. Addl Ciat 2(3), Mumbai

In the result, appeal filed by the assessee is partly allowed

ITA 120/MUM/2013[2008-09]Status: DisposedITAT Mumbai10 Nov 2023AY 2008-09

Bench: Shri Vikas Awasthy, Hon'Ble & Shri S. Rifaur Rahman, Hon'Ble

Section 144C(5)Section 14ASection 43BSection 80

Brand Equity, observing the same to be non business expenditure. 5. The learned Assessing Officer erred in treating the Computer Up gradation expenses as Capital expenditure and thereby adding a sum of Rs.10,68,318 (net of depreciation) to the income of the assessee. 6. The learned Assessing Officer erred

Raghuvir Singh, Delhi vs. Pr. CIT, Faridabad

ITA 1132/DEL/2022[2017-18]Status: DisposedITAT Delhi10 Nov 2023AY 2017-18

Bench: Shri N.K. Billaiya & Ms Astha Chandra

For Appellant: Dr. Rakesh Gupta, AdvFor Respondent: Shri P.N. Barnwal, CIT-DR
Section 11Section 142(1)Section 143(2)Section 263Section 54B

Revenue was that while passing the assessment order, the AO did not consider this aspect specifically whether the expenditure in question was revenue or capital expenditure. This argument predicates on the assessment order, which apparently does not give any reasons while allowing the entire expenditure as revenue expenditure. However, that

Icici Bank Ltd, Mumbai vs. Addl CIT RG (1), Mumbai

Appeals are partly allowed

ITA 4248/MUM/2014[2007-08]Status: DisposedITAT Mumbai09 Nov 2023AY 2007-08

Bench: Shri Amit Shukla () & Ms. Padmavathy S. ()

Section 10(15)Section 115JSection 234BSection 41(4)Section 88ESection 90

nature for the reason that the payment made is towards initial payments for entrance that pertains to several years and therefore, held it as capital expenditure. 65. The Ld. CIT(A) deleted the disallowance made by the AO by relying of its own order for Ay 2006-07 in assessee

DCIT Cir 3(1), Mumbai vs. Icici Bank Ltd, Mumbai

Appeals are partly allowed

ITA 4158/MUM/2014[2007-08]Status: DisposedITAT Mumbai09 Nov 2023AY 2007-08

Bench: Shri Amit Shukla () & Ms. Padmavathy S. ()

Section 10(15)Section 115JSection 234BSection 41(4)Section 88ESection 90

nature for the reason that the payment made is towards initial payments for entrance that pertains to several years and therefore, held it as capital expenditure. 65. The Ld. CIT(A) deleted the disallowance made by the AO by relying of its own order for Ay 2006-07 in assessee

Subodh Kumar Choudhary, Delhi vs. ITO Ward 32(3), Delhi

In the result, appeal of the assessee is allowed for statistical purpose

ITA 361/DEL/2023[2018-19]Status: DisposedITAT Delhi09 Nov 2023AY 2018-19

Bench: Shri G. S. Pannu, Hon’Ble Vice-A N D Shri Challa Nagendra Prasad

For Appellant: Shri Saurav Rohatgi
Section 143(1)Section 36(1)(va)Section 37(1)

nature of expenditure prescribed in Sections 30 to 36 of the Act and also not being in the nature of capital expenditure or personal expenses of the assessee. Thus, in view of such mandate of law, the deduction of expenditure under the general clause of Section 37(1) would

Rambagh Golf Club, Jaipur vs. ITO Exemptions, Jaipur

In the result the appeal of the assessee in ITA No

ITA 444/JPR/2023[2014- 15]Status: DisposedITAT Jaipur09 Nov 2023

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Sh. P. C. Parwal (FCA)For Respondent: Smt. Monisha Chaudhary (Addl. CIT)
Section 143(2)Section 143(3)Section 32Section 35Section 35(2)

Union of India (1993) 199 ITR 43, the Supreme Court held that when deduction under section 35(2) (iv) was allowed in respect of capital expenditure on scientific research, no depreciation was to be allowed under section 32 on the same assets. There is a fundamental axiom that double deduction ... been allowed in relation to a capital assets under other section (As for example, section 35 which permits a deduction in respect of capital expenditure for scientific research), the tax payers have contended that such deduction is independent of the allowance by way of depreciation. In our view, the intention

Rambagh Golf Club, Jaipur vs. ITO Exemption, Jaipur

In the result the appeal of the assessee in ITA No

ITA 443/JPR/2023[2013- 14]Status: DisposedITAT Jaipur09 Nov 2023

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Sh. P. C. Parwal (FCA)For Respondent: Smt. Monisha Chaudhary (Addl. CIT)
Section 143(2)Section 143(3)Section 32Section 35Section 35(2)

Union of India (1993) 199 ITR 43, the Supreme Court held that when deduction under section 35(2) (iv) was allowed in respect of capital expenditure on scientific research, no depreciation was to be allowed under section 32 on the same assets. There is a fundamental axiom that double deduction ... been allowed in relation to a capital assets under other section (As for example, section 35 which permits a deduction in respect of capital expenditure for scientific research), the tax payers have contended that such deduction is independent of the allowance by way of depreciation. In our view, the intention

Rambagh Golf Club, Jaipur vs. ITO Exemptions, Jaipur

In the result the appeal of the assessee in ITA No

ITA 442/JPR/2023[2012- 13]Status: DisposedITAT Jaipur09 Nov 2023

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Sh. P. C. Parwal (FCA)For Respondent: Smt. Monisha Chaudhary (Addl. CIT)
Section 143(2)Section 143(3)Section 32Section 35Section 35(2)

Union of India (1993) 199 ITR 43, the Supreme Court held that when deduction under section 35(2) (iv) was allowed in respect of capital expenditure on scientific research, no depreciation was to be allowed under section 32 on the same assets. There is a fundamental axiom that double deduction ... been allowed in relation to a capital assets under other section (As for example, section 35 which permits a deduction in respect of capital expenditure for scientific research), the tax payers have contended that such deduction is independent of the allowance by way of depreciation. In our view, the intention

Rambagh Golf Club, Jaipur vs. ITO Exemption, Jaipur

In the result the appeal of the assessee in ITA No

ITA 441/JPR/2023[2011- 12]Status: DisposedITAT Jaipur09 Nov 2023

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Sh. P. C. Parwal (FCA)For Respondent: Smt. Monisha Chaudhary (Addl. CIT)
Section 143(2)Section 143(3)Section 32Section 35Section 35(2)

Union of India (1993) 199 ITR 43, the Supreme Court held that when deduction under section 35(2) (iv) was allowed in respect of capital expenditure on scientific research, no depreciation was to be allowed under section 32 on the same assets. There is a fundamental axiom that double deduction ... been allowed in relation to a capital assets under other section (As for example, section 35 which permits a deduction in respect of capital expenditure for scientific research), the tax payers have contended that such deduction is independent of the allowance by way of depreciation. In our view, the intention

Rambagh Golf Club, Jaipur vs. ITO Exemption, Jaipur

In the result the appeal of the assessee in ITA No

ITA 440/JPR/2023[2006- 07]Status: DisposedITAT Jaipur09 Nov 2023

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Sh. P. C. Parwal (FCA)For Respondent: Smt. Monisha Chaudhary (Addl. CIT)
Section 143(2)Section 143(3)Section 32Section 35Section 35(2)

Union of India (1993) 199 ITR 43, the Supreme Court held that when deduction under section 35(2) (iv) was allowed in respect of capital expenditure on scientific research, no depreciation was to be allowed under section 32 on the same assets. There is a fundamental axiom that double deduction ... been allowed in relation to a capital assets under other section (As for example, section 35 which permits a deduction in respect of capital expenditure for scientific research), the tax payers have contended that such deduction is independent of the allowance by way of depreciation. In our view, the intention

Vodafone India Ltd, Mumbai vs. DCIT 7(3), Mumbai

In the result, the appeal of the assessee is treated as allowed and the appeal of the revenue is dismissed

ITA 1121/MUM/2014[2009-10]Status: DisposedITAT Mumbai08 Nov 2023AY 2009-10

Bench: Shri B.R. Baskaran (Am) & Shri Pavan Kumar Gadale (Jm)

Section 143(3)Section 3Section 80Section 80I

raised secured and unsecured loans. The Assessing Officer has disallowed expenditure on raising of loan for the reason that loan has been disbursed for capital expenditure and not for augmentation of the working capital and loan funds have been utilized for non-business considerations. While deciding the preceding grounds

Shri Bhaktinagar Co.-Op. Ho.Soc. Ltd., Rajkot vs. The Pr.CIT-3, Rajkot

ITA 89/RJT/2019[2014-15]Status: DisposedITAT Rajkot08 Nov 2023AY 2014-15

Bench: Smt.Annapurna Gupta & Shri T.R. Senthil Kumarassessment Year : 2014-15 Shri Bhaktinagar Co-Operative Vs. Pr.Cit-Iii Housing Society Ltd. Aaykar Bhavan Meghani Rang Bhavan Rajkot. Rajkot. Pan : Aaaas 2363 M अपीलाथ"/ (Appellant) "" यथ"/(Respondent) Assessee By : Shri Gautam Achary, Ld.Ar Revenue By : Shri Shramdeep Sinha, Ld.Cit-Dr सुनवाई क" तार"ख/Date Of Hearing : 10/08/2023 घोषणा क" तार"ख /Date Of Pronouncement: 08/11/2023 आदेश/O R D E R Per Annapurna Guptapresent Appeal Has Been Filed By The Assessee Against Order Passed By The Ld.Pr.Commissioner Of Income Tax-Iii, Rajkot [Hereinafter Referred To As “Ld.Pr.Cit By Exercising His Power Under Section 263 Of The Income Tax Act, 1961 ("The Act" For Short) Dated 18.2.2019 Pertaining To The Asst.Year2014-15. 2. The Grounds Raised In The Appeal Read As Under:

For Appellant: Shri Gautam Achary, ld.ARFor Respondent: Shri Shramdeep Sinha, ld.CIT-DR
Section 143(3)Section 22Section 23Section 24Section 263Section 80P(2)(c)

आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, राजकोट "यायपीठ आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण "यायपीठ "यायपीठ, , , , राजकोट "यायपीठ IN THE

Ummeed Child Development Center, Mumbai vs. ITO (Exem)-2(4), Mumbai

In the result, appeal of the assessee is allowed

ITA 1838/MUM/2023[2015-16]Status: DisposedITAT Mumbai06 Nov 2023AY 2015-16

Bench: Shri Kuldip Singh & Shri Gagan Goyal & Ummeed Child Development Centre, Gr. Floor, 1-B, 1/62 Mantri Pride, N. M. Joshi Marg, Lower Parel, Mumbai-400 011 ...... Appellant Vs. Ito (Exe.) – 2 (4), R. No. 503, 5Th Floor, Piramal Chambers, Lal Baug, Parel, Pan – Aaatu0678E ..... Respondent

For Appellant: Shri Saurabh Bhat, Ld. ARFor Respondent: Shri Ujjawal Kumar, Ld. DR
Section 11(6)Section 12ASection 250

adding back any appropriations or applications thereof towards the purposes of the trust or otherwise, and also after adding back any debits made for capital expenditure incurred for the purposes of the trust or otherwise. It should be noted, in this connection, that the amounts so added back will become

Indianoil Adani Ventures Limited (Formerly Known As "Indian Oiltanking Limited"), Mumbai vs. ITO - 10(3)(3), Mumbai

In the result, the appeals of the assessee in I

ITA 2402/MUM/2006[2002-2003]Status: DisposedITAT Mumbai06 Nov 2023AY 2002-2003

Bench: Shri Amit Shukla, Jm & Ms Padmavathy S, Am

For Appellant: Ms. Vasanti Patel a/w DeepaFor Respondent: Shri K.C Selvamani, CIT-DR
Section 115JSection 143(3)Section 144C(13)Section 14ASection 234D

without prejudice plea that the amounts incurred should be allowed as a deduction over the lease period or if the amounts incurred are treated capital expenditure, the assessee be should allowed depreciation on the same. The assessee also submitted that the amount paid for use of land on which pipelines ... allowed the claim of the assessee that the depreciation on the said amounts be allowed if it is to be treated as a capital expenditure and accordingly directed the AO. 17. With regard to expenditure incurred towards development and other charges, the ld AR submitted that the coordinate bench

Ntpc Vidyut Vyapar Nigam Ltd., New Delhi vs. PCIT-06, New Delhi

In the result, the appeal filed by the assessee is allowed

ITA 6816/DEL/2019[2013-14]Status: HeardITAT Delhi03 Nov 2023AY 2013-14

Bench: The A.O. & As Such The Jurisdiction On This Issue Under Section 263 Cannot Be Assumed.

Section 143(3)Section 263

Note 19) (Net of tax) 17,01,18,785 - Transfer from reserve and surplus (Note 3)(Net of tax) Less: Utilized during the year Capital expenditure (Note 10) - 49,15,087 Cost of fly ash/ash products (Note 21) 2,23,11,593 2,89,05,770 Employee benefits expense (Note

Sri Harikuttan T, Kayamkulam vs. Income Tax Officer Ward 2, Alleppey

In the result, the appeal filed by the assessee is partly allowed

ITA 885/COCH/2022[2017-18]Status: DisposedITAT Cochin03 Nov 2023AY 2017-18

Bench: Shri Sanjay Arora, Accountantmemberand Shri Manomohan Das, Judicialmember Harikuttan T. The Income Tax Officer (2) 1, Edayilaveetil Tharayil Aayakar Bhavan Njakkanal P.O., Pathiyoor Vs. Alappuzha Co0Llectorate Kayalmulam 690533 Alappuzha 688011 [Pan:Alrpt7536J] (Appellant) (Respondent) Appellant By: Shri M.S. Venkitachalam, Ca Respondent By: Smt. J.M. Jamuna Devi, Sr. D.R. Date Of Hearing:08.08.2023 Date Of Pronouncement:03.11.2023 O R D E R Per Sanjay Arora, Am This Is An Appeal By Assessee Challenging The Confirmation Of Penalty Levied Under Section 270A Of The Income Tax Act, 1961 (The Act) For Assessment Year (Ay) 2017-18 Vide Order Dated 17/02/2022, By The First Appellate Authority, Being The Commissioner Of Income Tax, Nfac [Cit(A)] Vide It’S Order Dated 06.07.2022. 2.1 The Brief Background Facts Of The Case Are That The Assessee, A Retired Defence Personnel, Is A Registered Money Lender Under The Kerala Money Lenders Act (Kml Act), Lending Money On Interest Against Mortgage Of Loan. For The Relevant Year He Returned, Besides Pension, Income From This Business At Rs.2,05,691. On Verification, It Was Found By The Assessing Officer (Ao) That The Assessee Was Maintaining Six Bank Accounts, I.E., Three Each With Two Banks, Being South Indian Bank (Sib) & State Bank Of India (Sbi). Transactions With The Former Were Undisclosed. The Reason Explained Was That The Gold Pawned By His Customers With Him For Availing Loan, Was In Turn Mortgaged With This Bank To Source Funds For Further Lending. These

For Appellant: Shri M.S. Venkitachalam, CAFor Respondent: Smt. J.M. Jamuna Devi, Sr. D.R
Section 143Section 143(3)Section 148Section 270ASection 274Section 37(1)

under: “37. (1) Any expenditure (not being expenditure of the nature described in sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee), laid out or expended wholly and exclusively for the purposes of the business or profession shall be allowed

Deputy Commissioner of Income Tax 12(2)(2), Mumbai vs. Group M Media (India) Private Limited, Mumbai

In the result the appeal filed by the revenue and cross objection filed by the assessee are stand dismissed

ITA 3087/MUM/2019[2011-12]Status: DisposedITAT Mumbai31 Oct 2023AY 2011-12

Bench: Aby T Varkey & Shri Amarjit Singhco No. 137/Mum/2021 (A.Y. 2011-12) Group M Media (India) Vs. Dcit-12(2)(2) Pvt. Ltd. Room No. 145, 1 St Floor, 8Th Floor, Commerz Aayakar Bhavan, International Business M.K. Road, Park, Oberoi Garden Mumbai-400020 City, Off Western Express Highway, Goregaon (E), Mumbai-400063 स्थायी लेखा सं./जीआइआर सं./ Pan/Gir No: Aaccm7365H Appellant .. Respondent Dcit-12(2)(2) Vs. Group M Media (India) Room No. 145, 1 St Floor, Pvt. Ltd. Aayakar Bhavan, 8Th Floor, Commerz M.K. Road, International Business Mumbai-400020 Park, Oberoi Garden City, Off Western Express Highway, Goregaon (E), Mumbai-400063 स्थायी लेखा सं./जीआइआर सं./ Pan/Gir No: Aaccm7365H Appellant .. Respondent Appellant By : Shri. Nikhil Tiwari Respondent By : Shri. Ganesh Rakh Date Of Hearing 27.10.2023 Date Of Pronouncement 31.10 .2023

For Appellant: Shri. Nikhil TiwariFor Respondent: Shri. Ganesh Rakh
Section 143(2)Section 143(3)Section 36(1)(iii)

action of the learned AO for disallowing software expenses amounting to Rs.17,58,125 incurred towards its day to day business requirement, considered as capital expenditure. Appellant craves leave to add, alter, vary, omit, substitute or amend the above grounds of appeal, at any time before or at, the time

M/S Sanofi India Ltd (Formerly Known As Aventis Pharma Ltd, Mumbai vs. The ACIT RG 8(1), Mumbai

In the result, appeal filed by the Revenue is dismissed

ITA 1606/MUM/2007[2003-2004]Status: DisposedITAT Mumbai31 Oct 2023AY 2003-2004

Bench: Shri Vikas Awasthy, Hon’Ble & Shri S. Rifaur Rahman, Hon'Ble

Section 271(1)(c)

case and in law, the learned CIT(A) has erred in confirming the disallowance of repairs expenditure of Rs. 1,27,66,471/- as capital expenditure and has also erred in allowing only depreciation of Rs. 12,76,648/- with reference to the same. He ought not to have done