“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)Cen Cir 1(4), Mumbai vs. Grasim Industires Ltd, Mumbai

In the result, appeal of the Revenue is partly

ITA 3334/MUM/2016[2009-10]Status: DisposedITAT Mumbai23 May 2025AY 2009-10

Bench: Shri Saktijit Dey, Vp & Shri N.K. Billaiya, Am

Section 37(1)Section 40Section 8O

Assessing Officer, the assessee filed a detailed submission justifying the claim. The Assessing Officer, did not accept assessee’s claim and treated it as capital expenditure. Of course, the Assessing Officer computed depreciation at the rate of 60%. The aforesaid decision of the Assessing Officer was also confirmed by learned ... year under consideration. 54. Learned DR submitted, since the expenditure is linked to sale of asset, it has to be treated as capital expenditure and can be allowed as deduction while computing capital gain. 55. Having considered rival submissions, we are of the view that the expenditure incurred

Grasim Industries Ltd., Mumbai vs. DCIT Cent. Cir. 1(4), Mumbai

In the result, appeal of the Revenue is partly allowed for statistical purpose

ITA 2224/MUM/2016[2009-10]Status: DisposedITAT Mumbai23 May 2025AY 2009-10

Bench: Shri Saktijit Dey, Vp & Shri N.K. Billaiya, Am M/S Grasim Industries Ltd. Dcit, (Corporate Finance Division) Central Circle 1(4), A-2, Aditya Birla Centre, Vs. Room No. 902, S.K. Ahire Marg, Worli, Old Cgo Building, Mumbai - 400030 Mumbai-400020 (Appellant) : (Respondent) Pan No. Aaacg 4464B Dcit, M/S Grasim Industries Ltd. Central Circle 1(4), (Corporate Finance Division) Room No. 902, A-2, Aditya Birla Centre, Old Cgo Building, Vs. S.K. Ahire Marg, Worli, Mumbai-400020 Mumbai - 400030 Appellant By : Shri J.D. Mistri, Sr. Advocate, Shri Madhur Agarwal & Respondent By : Shri Dr. Kishor Dhule, Cit(Dr) (Appellant) (Respondent)

For Appellant: Shri J.D. Mistri, Sr. AdvocateFor Respondent: Shri Dr. Kishor Dhule, CIT(DR)

Section 37(1)Section 40Section 80I

Privi Life Sciences P.Ltd, Navi Mumbai vs. CIT 24, Mumbai

In the result, appeal of the assessee is partly allowed

ITA 5399/MUM/2015[2011-12]Status: DisposedITAT Mumbai23 May 2025AY 2011-12

Bench: Smt. Beena Pillai & Shri Girish Agrawalassessment Year: 2011-12

For Appellant: Shri Haridas Bhatt, CAFor Respondent: Shri Mahesh Pamnani (SR. DR)

Section 143(3)(ii)Section 68

upholding the disallowance of Rs 1,90,000/- being expenditure incurred for stamping and registration of technology agreement on the ground that same constitutes capital expenditure. 2.2. The learned CIT(A) failed to appreciate that franking is a mode of making stamp duty payment and further erred in treating ... same as capital expenditure solely on the ground that it will enduring benefit. 2.3. The learned CIT(A) ought to have held that test of enduring benefit fails if the expenditure is revenue field and therefore ought to have allowed the same as revenue expenditure. III Disallowance of Travelling expenses

ACIT, Circle-24(1), New Delhi vs. Spring Infradev Ltd., New Delhi

ITA 611/DEL/2020[2016-17]Status: DisposedITAT Delhi23 May 2025AY 2016-17

Bench: Shri Yogesh Kumar Us & Shri Brajesh Kumar Singh[Assessment Year:2016-17]

Section 143(3)Section 45Section 47

that since the appellant in its return had taken a conscious explicit plea with regard to the part of the claim being ascribable to capital expenditure and partly to revenue expenditure, it was not open for the appellant to plead for the first time before the ITAT that the entire ... objection given by the representative of the department, allowing the appellant to set up the fresh claim to treat the amount declared as capital expenditure in the returns (as originally filed), as revenue expenditure. As a result, the objection now taken by the department cannot be countenanced. 11. Learned

Cooper Corporation Private Limited, Satara vs. National Eassessment Centre, Not Known

In the result, the appeal filed by the assessee is allowed for statistical purposes

ITA 212/PUN/2025[2020-21]Status: DisposedITAT Pune22 May 2025AY 2020-21

Bench: Shri R. K. Panda & Ms. Astha Chandraassessment Year : 2020-21 Cooper Corporation Pvt. Ltd. Dcit, Satara Circle, Satara M60-1, Nariman House, Additional Vs. Midc, Vijay Nagar, Gojegaon B.O., Satara – 415004 Pan: Aaacc9687J (Appellant) (Respondent) Assessee By : Shri Krishna V Gujarathi Department By : Shri Amol Khairnar Cit-Dr Date Of Hearing : 14-05-2025 Date Of Pronouncement : 22-05-2025 O R D E R

For Appellant: Shri Krishna V GujarathiFor Respondent: Shri Amol Khairnar CIT-DR

Section 143(2)Section 35

assessee company has claimed total expenses of Rs.8,46,11,588/- during the year on research and development (Rs.3,11,27,790/- as capital expenditure and Rs.5,34,83,768/- as revenue expenditure). On verification of submissions made by the assessee in support of claim of deductions the Assessing Officer ... their in house research facility. The assessee company has claimed total expenses of Rs.84611588 during the year on research and development (Rs.31127790/- as capital expenditure Rs.53483768/- and as revenue expenditure). On verification of submissions made by the assessee in support of claim of deductions were verified and found that

Future Focus Infotech Pvt. Ld., Chennai vs. ITO, Corporate Ward-2(1), Chennai

In the result, the appeal filed by the assessee is allowed for statistical purposes

ITA 22/CHNY/2025[2020-21]Status: DisposedITAT Chennai22 May 2025AY 2020-21

Bench: Shri Aby T. Varkey & Shri Jagadishआयकर अपील सं./Ita No.22/Chny/2025 िनधा6रण वष6 /Assessment Year: 2020-21 Future Focus Infotech Pvt. Ltd., The Income Tax Officer, Rr Towers Ii 94/95 (Ground Floor), Vs. Corporate Ward-2(1), Tvk Industrial Estates, Guindy, Chennai. Chennai – 600 032. [Pan: Aaacf 3250G]

For Appellant: Shri N. Arjun Raj, AdvocateFor Respondent: Ms. R. Anitha, Addl. CIT

Section 143(1)Section 143(3)Section 37Section 37(1)

mentioned in the reasons for selection of the case and therefore, the Ld CIT(A) should have adjudicated the claim of disallowances of capital expenditure written off u/s 37(1) of the Act. We, accordingly remit the matter to the file of Ld CIT(A) to adjudicate the issue

ACIT, Exemption Circle, Ranchi vs. M/S. R.V.S. Educational Trust, Jamshedpur

In the result, appeal of the revenue is dismissed

ITA 24/RAN/2020[16-17]Status: DisposedITAT Ranchi21 May 2025

Bench: Shri George Mathan, Jm & Shri Ratnesh Nandan Sahay, Am (Through : Hybrid Mode) आयकरअपीलसं./Ita No.24/Ran/2020 (Ǔ""ȡ[""""[/ A.Y. :2016-2017) Acit, Exemption Circle, Ranchi Vs. M/S Rvs Educational Trust, C/O Binda Apartments (India) Private Limited, Siroman Nagar, Dimna Road, Mango, Jamshedpur-831012 ̾Ĉĭēıĕĸù Ĭĝń/Pan No. : Aaatr4456M (\ "Ȣ"ȡ"ȸ/Appellant) (Ĥ×""ȸ/ Respondent) ..

For Appellant: Shri Shikesh Jha, ARFor Respondent: Shri Shiv Swaroop Singh, CIT-DR

Section 11(1)(d)Section 12ASection 143(3)

income. (ii) Rs.1,72,47,113/-Discussed and named as Repayment of Loan. Rs.1,72 (iii) Rs.4,39,31,322/-Discussed and named as Capital expenditure. (iv) Rs.69,66,832/ Discussed and named as Advertisement expenses. 4. That the Ld. CIT in his order dated 5.12.2019 confirm the disallowancesc Rs.1 ... charitable purpose and held that the assesse was entitled to the benefits under section 11 and 12 of the said Act. (ii) Disallowance of Capital Expenditure of Rs.4,39,31,322/- (a) That the assesse trust has made capital expenditure for different units during the year which are as under

The ACIT, Circle-2(1)(1), Ahmedabad vs. M/S. Intas Pharmaceuticals Ltd., Ahmedabad

Accordingly, this ground raised by the Revenue is dismissed

ITA 281/AHD/2021[2015-16]Status: DisposedITAT Ahmedabad21 May 2025AY 2015-16

Bench: S/Shri T.R. Senthil Kumar & Makarand V.Mahadeokarasstt.Year : 2015-16 Acit, Cir.2(1)(1) M/S.Intas Pharmaceuticals Ltd Vejalpur Vs Corporate House Ahmedabad. S.G. Highway Nr.Sola Bridge, Thaltej Ahmedabad 380 054. Pan : Aaaci 5120 L Asstt.Year : 2015-16 M/S.Intas Pharmaceuticals Ltd Acit, Cir.2(1)(1) Corporate House Vs Vejalpur S.G. Highway Ahmedabad. Nr.Sola Bridge, Thaltej Ahmedabad 380 054. Pan : Aaaci 5120 L (Applicant) (Responent) : Assessee By Shri S.N. Soparkar, Sr.Advocae & Shri Parin Shah, Ar : Shri Ragnesh Das, Cit-Dr Revenue By सुनवाई क" तारीख/Date Of Hearing : 28/04/2025 घोषणा क" तारीख /Date Of Pronouncement: 21/05/2025 आदेश आदेश/O R D E R आदेश आदेश

Section 115JSection 142(1)Section 143(2)Section 143(3)Section 144CSection 14ASection 35Section 36(1)(iii)Section 37Section 92C

assessee had claimed weighted deduction under section 35(2AB) of the Act amounting to Rs.399,01,05,709/-, comprising Rs.6,30,74,642/- towards capital expenditure and Rs.199,50,52,854/- towards revenue expenditure. However, upon verification of Form 3CL issued by the DSIR, it was noticed that only

Intas Pharmaceuticals Ltd., Ahmedabad vs. The DCIT, Circle-2(1)(1), Ahmedabad

Accordingly, this ground raised by the Revenue is dismissed

ITA 222/AHD/2021[2015-16]Status: DisposedITAT Ahmedabad21 May 2025AY 2015-16

Section 115JSection 142(1)Section 143(2)Section 143(3)Section 144CSection 14ASection 35Section 36(1)(iii)Section 37Section 92C

Asst. Commissioner of Income Tax 8(2)(1) Mumbai, Mumbai vs. Ms. Piramal Enterprises Limited, Mumbai

In the result, all the three appeals of the assessee are partly allowed and appeal of the Revenue is dismissed

ITA 2589/MUM/2024[2008-09]Status: DisposedITAT Mumbai21 May 2025AY 2008-09

Bench: Smt. Beena Pillai & Shri Girish Agrawal

For Appellant: Shri Ronak Doshi, CAFor Respondent: Shri R.A. Dhyani, CIT DR

Section 115JSection 143(3)Section 14ASection 80Section 80I

said letter of offer, objects for the issue are elaborated. In the said object, it is stated that the assessee proposes to finance capital expenditure for its new manufacturing facilities including Baddi with the proposed expenditure to be incurred up to March, 2007 of Rs.1,650 million for the Baddi

Piramal Enterprises Limited, Mumbai vs. The Assistant Commissioner of Income Tax Circle 7(3)(2), Mumbai

In the result, all the three appeals of the assessee are partly allowed and appeal of the Revenue is dismissed

ITA 2588/MUM/2024[2008-09]Status: DisposedITAT Mumbai21 May 2025AY 2008-09

Bench: Smt. Beena Pillai & Shri Girish Agrawal

For Appellant: Shri Ronak Doshi, CAFor Respondent: Shri R.A. Dhyani, CIT DR

Section 115JSection 143(3)Section 14ASection 80Section 80I

Piramal Enterprises Limited, Mumbai vs. The Deputy Commissioner of Income Tax, Circle 8(2)(1), Mumbai

In the result, all the three appeals of the assessee are partly allowed and appeal of the Revenue is dismissed

ITA 2584/MUM/2024[2009-10]Status: DisposedITAT Mumbai21 May 2025AY 2009-10

Bench: Smt. Beena Pillai & Shri Girish Agrawal

For Appellant: Shri Ronak Doshi, CAFor Respondent: Shri R.A. Dhyani, CIT DR

Section 115JSection 143(3)Section 14ASection 80Section 80I

Piramal Enterprises Limited, Mumbai vs. The Deputy Commissioner of Income Tax, Circle 8(2)(1), Mumbai

In the result, all the three appeals of the assessee are partly allowed and appeal of the Revenue is dismissed

ITA 2582/MUM/2024[2010-11]Status: DisposedITAT Mumbai21 May 2025AY 2010-11

Bench: Smt. Beena Pillai & Shri Girish Agrawal

For Appellant: Shri Ronak Doshi, CAFor Respondent: Shri R.A. Dhyani, CIT DR

Section 115JSection 143(3)Section 14ASection 80Section 80I

ACIT 6(3), Mumbai vs. Grasim Industires Ltd, Mumbai

In the result Revenue's appeal is dismissed

ITA 6758/MUM/2011[2008-09]Status: DisposedITAT Mumbai21 May 2025AY 2008-09

Bench: Shri Saktijit Dey, Vp & Shri N.K. Billaiya, Am

Section 36(1)(va)

disallowance. This ground is dismissed. 8. In Ground No.3, assessee has contested the disallowance of expenses incurred towards SAP-ERP expenses by treating as capital expenditure. 9. Briefly the facts are, in the year under consideration, the assessee had claimed deduction of an amount of Rs.5,03,37,991/- towards ... Though, the assessee had claimed the expenses as revenue expenditure, however, the AO did not accept assessee's claim and treated it as capital expenditure. The view expressed by the Assessing Officer was also upheld by learned First Appellate Authority. 10. We have heard the parties and perused the materials

Grasim Industries Ltd 9Corporate Finance Division), Mumbai vs. Asst CIT Cir 6(3), Mumbai

ITA 5982/MUM/2011[2008-09]Status: DisposedITAT Mumbai21 May 2025AY 2008-09

Bench: Shri Saktijit Dey, Vp & Shri N.K. Billaiya, Am

For Appellant: Shri J.D. Mistri, Sr. AdvocateFor Respondent: Date of Hearing

Section 36(1)(va)

Ground No.3, assessee has contested the disallowance of expenses incurred of Rs.5,03,37,991/- towards SAP-ERP expenses by treating as capital expenditure. 9. Briefly the facts are, in the year under consideration, the assessee had claimed deduction of an amount of Rs.5,03,37,991/- towards implementation ... Though, the assessee had claimed the expenses as revenue expenditure, however, the AO did not accept assessee's claim and treated it as capital expenditure. The view expressed by the Assessing Officer was also upheld by learned First Appellate Authority. 10. We have heard the parties and perused the materials

ACIT, Circle- 17(1), New Delhi vs. Moser Baer Solar Systems Pvt. Ltd., New Delhi

In the result, the appeal filed by the Revenue stands partly allowed for statistical purposes

ITA 3653/DEL/2018[2014-15]Status: DisposedITAT Delhi21 May 2025AY 2014-15

Bench: Shri Shamim Yahya & Shri Vimal Kumaracit, Circle 17(1), Vs. Moser Baer Solar New Delhi Systems Pvt. Ltd. 43B, Phase-Iii, Okhla Industrial Area, New Delhi – 20 (Pan: Aaica0910C) (Appellant) (Respondent)

For Appellant: Shri Neeraj Jain, Adv., Shri NikunjFor Respondent: Sh. Choudhary N.C. Roy, Sr. DR

Section 37(1)

this issue AO made the disallowance of professional fee amounting to Rs. 5,67,000/- paid to M/s Mott by treating the same as capital expenditure in the absence of any details furnished. Before the Ld. CIT(A), assessee furnished the details which was remanded back ... find that ld. CIT(A) has taken a correct view of the matter that expenditure for obtaining such report cannot be considered as capital expenditure, hence, this view of the Ld. CIT(A) deserves to be affirmed. In this regard, we place reliance upon the decision of the Apex Court

Jindal Photo Ltd., New Delhi vs. ACIT, CC- 30, New Delhi

ITA 4492/DEL/2017[2014-15]Status: DisposedITAT Delhi21 May 2025AY 2014-15

Bench: Shri Vikas Awasthy & Shri Naveen Chandra

For Appellant: Shri Rohit Jain, AdvFor Respondent: Ms. Baljeet Kaur, CIT-DR

Section 132Section 139(5)Section 153A

ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No

M/S Jindal Photo Ltd., New Delhi vs. ACIT, New Delhi

In the result, all the appeals of the assessee in ITA No

ITA 5451/DEL/2016[2013-14]Status: DisposedITAT Delhi21 May 2025AY 2013-14

Bench: Shri Vikas Awasthy & Shri Naveen Chandra

For Appellant: Shri Rohit Jain, AdvFor Respondent: Ms. Baljeet Kaur, CIT-DR

Section 132Section 153A

years (@ page 44-45 of main PB for AY 2009-10) 34. The ld AR argued that where grant of subsidy is for meeting capital expenditure, for achieving a national objective/purpose inpublic interest, the same would be in the nature of capital receipt not liable to tax and relied ... genius of its representatives. Therefore, to say that the indication of the limit of subsidy as the capital expended, means that it replenished the capital expenditure and therefore, the subsidy is capital, would not be justified. The specific provision for capital subsidy in the main scheme and the lack

M/S. Jindal Photo Ltd., New Delhi vs. ACIT, New Delhi

ITA 5257/DEL/2015[2012-13]Status: DisposedITAT Delhi21 May 2025AY 2012-13

Bench: Shri Vikas Awasthy & Shri Naveen Chandra

For Appellant: Shri Rohit Jain, AdvFor Respondent: Ms. Baljeet Kaur, CIT-DR

Section 132Section 139(5)Section 153A

ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No

M/S. Jindal Photo Ltd., New Delhi vs. ACIT, New Delhi

ITA 5256/DEL/2015[2011-12]Status: DisposedITAT Delhi21 May 2025AY 2011-12

Bench: Shri Vikas Awasthy & Shri Naveen Chandra

For Appellant: Shri Rohit Jain, AdvFor Respondent: Ms. Baljeet Kaur, CIT-DR

Section 132Section 139(5)Section 153A

ITA No. 5251 to 5257/DEL/2015 [A.Y 2006-07 to A.Y 2012-13] ITA No. 5451/DEL/2016 [A.Y 2013-14]; ITA No