“ capital expenditure ”

Tuticorin Alkali Chemicals & Fertilizers Ltd. v. CIT

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.

227 ITR 172 · 1997 · Supreme Court

621

Madras Industrial Investment Corporation Ltd. v. CIT

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.

225 ITR 802 · 1997 · Supreme Court

568

South Indian Bank Ltd. v. CIT

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.

438 ITR 1 · 2021 · Supreme Court

508

CIT v. Institute of Banking Personnel Selection

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.

264 ITR 110 · 2003 · High Court

398

Taparia Tools Ltd. v. JCIT

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.

372 ITR 605 · 2015 · Supreme Court

343

35 Taxmann.com 335 · 2013 · ITAT

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

322

Alembic Chemical Works Co. Ltd. v. CIT

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.

177 ITR 377 · 1989 · Supreme Court

275

ITA 601/DEL/2021[2016-17]Status: DisposedITAT Delhi04 Jan 2022AY 2016-17

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

Aricent Technologies (Holdings) Ltd., New Delhi vs. Addl. CIT, Special Range- 1, New Delhi

The appeal of the assessee stands allowed in terms of

Section 143(3)Section 144Section 32(1)(i)

facts and in law in treating the amount of discount a short capital receipt and the entire expenditure to be in the nature of capital expenditure. 5. That the Ld. AO erred on facts and in law in not granting deduction of profit on sale of assets, amounting

DCIT, Exemption Circle, Ghaziabad vs. G.T.B Charitable Trust, Meerut

In the result, the appeal of the Revenue is dismissed

ITA 6398/DEL/2018[2015-16]Status: DisposedITAT Delhi04 Jan 2022AY 2015-16

Bench: Shri Kul Bharat & Shri P.K.Kedia[Assessment Year : 2015-16] Dcit, Vs G.T.B. Charitable Trust, Exemption Circle, 227, West End Road, Meerut. Ghaziabad. Pan-Aaatg1992R Appellant Respondent Appellant By Shri Kumar Padmapani Bora, Sr.Dr Respondent By Shri Ramit Kakkar, Adv. Date Of Hearing 30.11.2021 Date Of Pronouncement 04.01.2022

Section 11Section 12ASection 143(3)Section 32

considered them while calculating the "Application of Income" . According to me, the assessee have already been taken effect of the same in revenue and capital expenditure claimed in the "Application of income " and allowing the same would tantamount to double deduction. Thus this ground of appeal is rejected

Jasmine Infratech Pvt. Ltd., New Delhi vs. ITO, New Delhi

The appeal of the assessee stands allowed

ITA 1856/DEL/2017[2012-13]Status: DisposedITAT Delhi04 Jan 2022AY 2012-13

Section 143(1)Section 14ASection 69C

unexplained expenditure without appreciating the fact that in the instant case there is no dispute with regard to the source of capital expenditure and it is also not in dispute that the assessee incurred expenditure and it is not the case of Revenue that the assessee claimed such expenditure

Gensuite Software Systems & Services Private Limited, Bangalore vs. Commissioner of Income Tax Appeals -3, Bangalore

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

ITA 671/BANG/2020[2018-19]Status: HeardITAT Bangalore03 Jan 2022AY 2018-19

Bench: Shri Chandra Poojari, Am & Shri George George K, Jm

For Appellant: Sri.Ramakrishna, CAFor Respondent: Sri.Ananda H., Addl.CIT-DR

Section 143(1)Section 37

company claimed amount paid towards subscription for acquisition of corporate membership in club as revenue expenditure but the Assessing Officer disallowed the same as capital expenditure. The Hon’ble Karnataka HC held that subscription amount paid by a company for obtaining corporate membership in a 3 M/s.Gensuite Software Systems & Services

Kotak Mahindra Bank Limited (As Successor in Business of Erstwhile Ing Vysya Bank Limited), Bangalore vs. Commissioner of Income Tax (Appeals)-I, Bangalore

In the result, the appeal of the revenue is dismissed and the grounds of appeal of the assessee remanded by the High Court for fresh consideration are allowed

ITA 748/BANG/2011[2001-02]Status: DisposedITAT Bangalore03 Jan 2022AY 2001-02

Bench: Shri N.V. Vasudevanand Shri B. R. Baskaran

For Appellant: Shri. S. Ananthan, CAFor Respondent: Shri. Sumeer Singh Meena, JCIT(DR)(ITAT), Bengaluru

Section 115JSection 143(3)

revenue in nature. 9. The learned CIT(A) while upholding the order of the learned assessing officer treating the expenditure on Vysyamulya Project as capital expenditure has failed to appreciate that the said expenditure has not brought about any enduring benefit or ownership of the asset to the Appellant ... licence wherein it was provided that the licence will be perpetual. The AO therefore came to the conclusion that the expenditure in question was capital expenditure. He also found that the assessee has capitalized these expenses in the books of accounts. The AO therefore rejected the claim of the assessee

ACIT, Bangalore vs. M/S the Vysya Bank Ltd., Bangalore

In the result, the appeal of the revenue is dismissed and the grounds of appeal of the assessee remanded by the High Court for fresh consideration are allowed

ITA 733/BANG/2011[2001-02]Status: DisposedITAT Bangalore03 Jan 2022AY 2001-02

Bench: Shri N.V. Vasudevanand Shri B. R. Baskaran

For Appellant: Shri. S. Ananthan, CAFor Respondent: Shri. Sumeer Singh Meena, JCIT(DR)(ITAT), Bengaluru

Section 115JSection 143(3)

DCIT, Circle- 11(2), New Delhi vs. Hughes Communication India Ltd., New Delhi

In the result, all the appeals being ITA No

ITA 5827/DEL/2017[2011-12]Status: DisposedITAT Delhi31 Dec 2021AY 2011-12

Bench: Shri G.S.Pannu & Shri Kul Bharat[Assessment Year : 2011-12] Dcit Vs Hughes Communication India Ltd. Cirlce-11(2) 1, Shivaji Marg, Westend Greens, New Delhi Nh-8, New Delhi Aaach0765L Appellant Respondent [Assessment Year : 2013-14] & [Assessment Year : 2014-15] Acit Vs Hughes Communication India Ltd. Cirlce-11(2) 1, Shivaji Marg, Westend Greens, New Delhi Nh-8, New Delhi Aaach0765L Appellant Respondent Sh. Ajay Vohra, Sr. Adv & Sh. Deepesh Appellant By Jain, Ca Respondent By Sh. Vinay Kumar Karan Cit(Dr) & Sh. Kumar Padmapani Bora , Sr. Dr Date Of Hearing 25.11.2021 Date Of Pronouncement 31.12.2021

licenses fee which give assessee company long term right to use telecommunication spectrum and the annual extension of the same be considered as capital expenditures.” 4. The facts giving rise to the present appeal are that in this case, the assessee filed its return of income declaring an income ... asked the assessee to explain as to why license fee paid to the Department of Telecommunication should not be disallowed being in nature of capital expenditure. In response thereto, the assessee filed its reply, the reply so filed was not accepted by the Assessing Officer and he proceeded to treat

Deputy Commissioner of Income Tax, Circle- 1(1)(2), Bangalore vs. M/S. Bioplus Life Sciences Private Limited, Bangalore

In the result appeals filed by assessee stands allowed and appeals filed by revenue stands partly allowed for assessment years 2012-13 & 2013-14

ITA 1374/BANG/2019[2013-14]Status: DisposedITAT Bangalore30 Dec 2021AY 2013-14

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiassessment Appeal No. Appellant Respondent Year M/S. Bioplus Life The Deputy Sciences Pvt. Ltd., Commissioner Of No. 10/1A, 2012-13

ITA 1373/BANG/2019[2012-13]Status: DisposedITAT Bangalore30 Dec 2021AY 2012-13

Total 1,17,71,503/- 2.5 The Ld.AO after considering the submissions advanced by assessee held the Product development expenses to be capital expenditure, as assessee did not prove the expenses to be recurring in nature. He relied on the decision of Hon’ble Supreme Court in case of R.B.Seth ... been allowed by the Ld.CIT(A) as revenue expenditure against which revenue is in appeal and item no.6-10 has been upheld to be capital expenditure against which assessee is in appeal. In general for all these above expenses, the Ld.AR submitted that these are incurred every year by assessee

Deputy Commissioner of Income Tax, Circle- 1(1)(2), Bangalore vs. M/S. Bioplus Life Sciences Private Limited, Bangalore

In the result appeals filed by assessee stands allowed and appeals filed by revenue stands partly allowed for assessment years 2012-13 & 2013-14

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiassessment Appeal No. Appellant Respondent Year M/S. Bioplus Life The Deputy Sciences Pvt. Ltd., Commissioner Of No. 10/1A, 2012-13

ITA 1255/BANG/2019[2013-14]Status: DisposedITAT Bangalore30 Dec 2021AY 2013-14

M/S. Bioplus Life Sciences Private Limited, Bengaluru vs. The Income Tax Officer, Ward - 1(1)(1), Bengaluru

In the result appeals filed by assessee stands allowed and appeals filed by revenue stands partly allowed for assessment years 2012-13 & 2013-14

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiassessment Appeal No. Appellant Respondent Year M/S. Bioplus Life The Deputy Sciences Pvt. Ltd., Commissioner Of No. 10/1A, 2012-13

ITA 1254/BANG/2019[2012-13]Status: DisposedITAT Bangalore30 Dec 2021AY 2012-13

M/S. Bioplus Life Sciences Private Limited, Bengaluru vs. The Assistant Commissioner of Income Tax, Circle- 2(1)(1), Bengaluru

In the result appeals filed by assessee stands allowed and appeals filed by revenue stands partly allowed for assessment years 2012-13 & 2013-14

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiassessment Appeal No. Appellant Respondent Year M/S. Bioplus Life The Deputy Sciences Pvt. Ltd., Commissioner Of No. 10/1A, 2012-13

ITA 330/DEL/2012[2005-06]Status: DisposedITAT Delhi30 Dec 2021AY 2005-06

Frick India Ltd., New Delhi vs. DCIT, New Delhi

Accordingly, the appeal filed by the assessee is allowed in terms of our

Bench: Shri G.S. Pannu & Shri Ravish Sood

For Appellant: Shri Tarandeep Singh, Advocate and Shri Pulkit Verma, AdvocateFor Respondent: Shri Sumit Kumar Varma, Sr. DR

Section 143(3)Section 14ASection 251(2)Section 263Section 94(7)

Rs.82,73,814/- paid to M/s Vilter Manufacturing Corporation USA as fee for user of knowhow by treating it as capital expenditure. 2.1 That the CIT(A) erred in not dealing with ground No.3.1, which was taken without prejudice, to the effect that the Assessing Officer erred in not allowing ... amount paid by the assessee to M/s Vilter Manufacturing Corporation, USA as fee for user of know-how by treating it as a capital expenditure. Page 18 of 37 Frick India Ltd. Vs. DCIT, Circle 11(1), New Delhi 19 ITA Nos. 2072/Del/2008 & 330/Del/2012 – A.Ys

Frick India Ltd vs. DCIT Circle-11 (1)

Accordingly, the appeal filed by the assessee is allowed in terms of our

ITA 2072/DEL/2008[2004-2005]Status: DisposedITAT Delhi30 Dec 2021AY 2004-2005

Bench: Shri G.S. Pannu & Shri Ravish Sood

For Appellant: Shri Tarandeep Singh, Advocate and Shri Pulkit Verma, AdvocateFor Respondent: Shri Sumit Kumar Varma, Sr. DR

Section 143(3)Section 14ASection 251(2)Section 263Section 94(7)

M/S Herbalife International India Private Limited, Bangalore vs. Deputy Commissioner of Income Tax Circle-11(4), Bangalore

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

ITA 2742/BANG/2018[2008-09]Status: DisposedITAT Bangalore29 Dec 2021AY 2008-09

Bench: Shri N.V. Vasudevanand Shri B. R. Baskaranassessment Year :2008-09 M/S. Herbalife International India Vs. Dcit - 11(4), Private Limited, Bengaluru. Pardhanani Wilshire #14, Commissariat Road, Bengaluru – 560 025. Pan : Aaach 8025 R Appellant Respondent Assessee By : Shri. Nageshwar Rao, Advocate Revenue By : Shri. Sankar Ganesh K, Jcit(Dr)(Itat), Bengaluru Date Of Hearing : 27.12.2021 Date Of Pronouncement : 29.12.2021 O R D E R Per N. V. Vasudevanthis Is An Appeal Filed By The Assessee Against Order Dated 27.08.2018 Of Cit(A)-3, Bengaluru, Relating To Assessment Year 2008-09. The Grounds Of Appeal Nos.2 To 12 Raised By The Assessee Reads As Follows:

For Appellant: Shri. Nageshwar Rao, AdvocateFor Respondent: Shri. Sankar Ganesh K, JCIT(DR)(ITAT), Bengaluru

that the assessee has claimed depreciation on the improvements made to the lease hold premises shows that the assessee itself accepts the expenditure as capital expenditure. The CIT(A) therefore did not go into the question whether the expenditure is capital or revenue in nature but focused mainly ... question whether the capital expenditure is purely temporary erection or not. The CIT(A) gave finding on each item of expenditure incurred by the Assessee at the various leased premises and held that the expenditure cannot be considered as purely temporary erections entitled to 100% depreciation. He however gave

ACIT, New Delhi vs. M/S Krishak Bharati Cooperative Ltd., New Delhi

In the result, the appeal of the assessee in ITA No

ITA 2973/DEL/2017[2011-12]Status: DisposedITAT Delhi29 Dec 2021AY 2011-12

Bench: Shri Anil Chaturvedi & Shri Kul Bharat

ITA 2972/DEL/2017[2010-11]Status: DisposedITAT Delhi29 Dec 2021AY 2010-11

lease is revenue expenditure and is in the nature of rent paid for the use of land. It is not in the nature of capital expenditure as the assessee does not get any legal title or any right over the land. 3. The ld. CIT(A) has erred ... lease is revenue expenditure and is in the nature of rent paid for the use of land. It is not in the nature of capital expenditure as the assessee does not get any legal title or any right over the land. 3. The ld. CIT(A) has erred

ACIT, New Delhi vs. M/S Krishak Bharati Cooperative Ltd., New Delhi

In the result, the appeal of the assessee in ITA No

Bench: Shri Anil Chaturvedi & Shri Kul Bharat

ITA 2342/DEL/2017[2011-12]Status: DisposedITAT Delhi29 Dec 2021AY 2011-12

M/S. Krishak Bharti Cooperative Ltd., New Delhi vs. ACIT, New Delhi

In the result, the appeal of the assessee in ITA No

Bench: Shri Anil Chaturvedi & Shri Kul Bharat

ITA 2341/DEL/2017[2010-11]Status: DisposedITAT Delhi29 Dec 2021AY 2010-11

M/S. Krishak Bharti Cooperative Ltd., New Delhi vs. ACIT, New Delhi

In the result, the appeal of the assessee in ITA No

Bench: Shri Anil Chaturvedi & Shri Kul Bharat