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“revenue expenditure”

Business ExpensesSection 37Section 373,350 judgments

The decision most relied on for revenue expenditure is CIT v. Woodward Governor India Pvt. Ltd. (312 ITR 254), cited in 968 judgments on BharatTax.

Leading authorities on revenue expenditure

CIT v. Woodward Governor India Pvt. Ltd.
312 ITR 254 · 2009 · Supreme Court
968
citing judgments

Foreign exchange fluctuations, whether gains or losses, are inextricably linked to the underlying business transaction and must be accounted for under the mercantile system. The Supreme Court also affirmed the standard accounting principle of valuing stock at cost or net realisable value, whichever is lower.

CIT v. Excel Industries Ltd.
358 ITR 295 · 2013 · Supreme Court
935
citing judgments

When an income or expenditure is revenue neutral across different assessment years, where any benefit derived is offset by a corresponding liability or reversal, no additional tax liability arises, particularly concerning income recognition under the mercantile system of accounting.

Rotork Controls India Pvt. Ltd. v. CIT
314 ITR 62 · 2009 · Supreme Court
739
citing judgments

A provision for expenses, such as warranty, is a deductible liability for income tax purposes if it constitutes a present obligation arising from past events, and a reliable estimate of the amount of obligation is possible.

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.

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.

Umacharan Shaw & Bros. v. CIT
37 ITR 271 · 1959 · Supreme Court
567
citing judgments

An income tax assessment or addition cannot be sustained solely on the basis of suspicion, surmises, or conjectures, as strong suspicion does not amount to proof. The revenue authorities must rely on concrete evidence and material to frame an assessment.

Sony Ericsson Mobile Communications India Pvt. Ltd. v. CIT
374 ITR 118 · 2015 · High Court
499
citing judgments

The existence of an international transaction for Advertising and Marketing Promotion (AMP) expenditure requires the revenue to discharge the burden of proof. An explanation inserted under Section 92B does not automatically make AMP expenditure an international transaction.

CIT v. Dalmia Cement (Bharat) Ltd.
254 ITR 377 · 2002 · High Court
417
citing judgments

When there is a nexus between an expenditure and the purpose of business, incurred on grounds of commercial expediency, the Revenue cannot question its reasonableness or assume the role of the businessman to compel profit maximization. This principle applies even if the business is not that of the assessee itself.

Judgments citing revenue expenditure

DCIT Circle-4(2), New Delhi vs. Bharti Hexacom Ltd., Delhi

In the result, the appeals of the revenue are partly allowed as indicated above

ITA 1111/DEL/2023[2017-18]Status: DisposedITAT Delhi12 Dec 2025AY 2017-18

Bench: Shri C.N. Prasad & Shri M. Balaganesh

Section 143(3)Section 194HSection 260ASection 35ASection 37(1)Section 40

facts and circumstances of the case by allowing the license fee on revenue sharing basis after July 31, 1999 to be treated as revenue expenditure ignoring the fact that Revenue has filed SLP before Hon'ble Apex Court against the order of Hon'ble Delhi High Court for A. Y.2003-04 ... spectrum charges to its profit and loss account. The assessee was show caused to explain why the license fees and spectrum charges claimed as revenue expenditure should not be treated as capital in nature and accordingly deduction u/s.35ABB should be allowed. The assessee furnished detailed reply which the AO extracted

DCIT Circle 4(2), New Delhi vs. Bharti Hexacom Ltd., Delhi

In the result, the appeals of the revenue are partly allowed as indicated above

ITA 1110/DEL/2023[2016-17]Status: DisposedITAT Delhi12 Dec 2025AY 2016-17

Bench: Shri C.N. Prasad & Shri M. Balaganesh

Section 143(3)Section 194HSection 260ASection 35ASection 37(1)Section 40

facts and circumstances of the case by allowing the license fee on revenue sharing basis after July 31, 1999 to be treated as revenue expenditure ignoring the fact that Revenue has filed SLP before Hon'ble Apex Court against the order of Hon'ble Delhi High Court for A. Y.2003-04 ... spectrum charges to its profit and loss account. The assessee was show caused to explain why the license fees and spectrum charges claimed as revenue expenditure should not be treated as capital in nature and accordingly deduction u/s.35ABB should be allowed. The assessee furnished detailed reply which the AO extracted

Subhash Jaiswal Associates, Bareilly vs. PCIT Bareilly, Bareilly

ITA 100/LKW/2022[2017-18]Status: DisposedITAT Lucknow11 Dec 2025AY 2017-18

Bench: Shri Anadee Nath Misshra & Shri Subhash Malguria

For Appellant: Respondent by
Section 143(3)Section 263

Gabriel India Ltd., 203 ITR 108 Bombay (1993) In this case, the assessee had claimed certain expenses as revenue expenditure. The Income-tax Officer (ITO) sought details of the same and the assessee gave the details and explained the nature of expenditure. The ITO considered the explanation and allowed ... revenue or capital expenditure. This argument predicts on the assessment order, which apparently does not give any reasons while allowing the entire expenditure as revenue expenditure. However, that by itself would not be indicative of the fact that the Assessing Officer had not applied his mind on the issue. There

International Seaport (Haldia) Pvt. Ltd., Kolkata vs. ACIT, Cir-12(1), Kolkata

In the result, appeal of the assessee is allowed

ITA 328/KOL/2023[2018-19]Status: DisposedITAT Kolkata11 Dec 2025AY 2018-19

Bench: Shri George Mathan & Shri Rajesh Kumarआयकर अपील सं/Ita No.328/Kol/2023 (निर्धारण वर्ा / Assessment Year : 2018-2019) International Seaport (Haldia) Vs Acit, Circle-12(1), Kolkata Private Limited, C/O S.N.Ghosh & Associates, Advocates, 2, Garstin Place, 2Nd Floor, Suite No.203, Off Hare Street, Kolkata-700001 Pan No. :Aaci 9468 D (अपीलधर्थी /Appellant) (प्रत्यर्थी / Respondent) .. निर्धाररती की ओर से /Assessee By Shri Somnath Ghosh, Ar रधजस्व की ओर से /Revenue By : Shri Santanu Ghosh, Sr.Dr सुनवाई की तारीख / Date Of Hearing : 11/12/2025 घोषणा की तारीख/Date Of Pronouncement : 11/12/2025 आदेश / O R D E R Per Bench : This Is An Appeal Filed By The Assessee Against The Order Of The Ld. Cit(A), National Faceless Appeal Centre (Nfac), Delhi, Dated 06.02.2023 For The Assessment Year 2018-2019. 2. It Was Submitted By The Ld.Ar That Two Issues Are Involved In The Assessee’S Appeal, One Is The Denial Of The Deduction U/S.80Ia Of The Act In Respect Of Miscellaneous Income To An Extra Rs.4,99,372/- & The Second Issue Was Disallowance Of The Disallowance Of The Amortization Of The Leasehold Rent Allegedly By The Ao Claiming The Same To Be Claim Of Depreciation To An Extent Of Rs.42,32,776/-. It Was Submission That In Respect Of The One Number Imported Slewing Ring Roller Bearing From The Original Manufacturer Of The Same I.E. Rothe Erde, Germany, Which Was An Important & Expensive Spare Required For The Operation Of The Stacking &

For Respondent: Shri Santanu Ghosh, Sr.DR
Section 143(3)Section 80Section 80I

cent, redeemable after 12 years. The assessee in that case claimed the expenditure incurred by way of discount on debentures as revenue expenditure and wrote off proportionate expenditure for the relevant assessment year, taking into account the period of 12 years which was the period of redemption. Hon'ble Supreme ... continuing liability which stretches over a period of 12 years. It is, therefore, a liability spread over a period of 12 years. Ordinarily, revenue expenditure which is incurred wholly and exclusively for the purpose of business must be allowed in its entirety in the year in which it is incurred

Vodafone West Limited, (Formerly Known As Vodafone Essar Gujarat Limited), Ahmedabad vs. The Dy.CIT, Circle-4(1)(2), Ahmedabad

In the result, the appeal by the Revenue is partly allowed for statistical

ITA 671/AHD/2015[2010-11]Status: DisposedITAT Mumbai11 Dec 2025AY 2010-11

Bench: Shri Vikram Singh Yadavshri Sandeep Singh Karhail

For Appellant: Shri K.K. VedFor Respondent: Shri Pankaj Kumar, CIT-DR
Section 142Section 143(2)Section 143(3)Section 144CSection 144C(5)Section 45Section 47Section 48Section 50D

enduring benefit, though the payments are recurring. Accordingly, the AO proposed to disallow the treatment of license fees paid during the year as revenue expenditure and, after appropriate deduction under section 35ABB of the Act, an amount of Rs. 172,48,44,119/- was proposed to be added ... case for the assessment year 2006-07, held that the license fees paid by the assessee on a revenue sharing basis are allowable as revenue expenditure deductible under section 37(1) of the Act. Accordingly, the learned DRP directed the AO to delete the proposed addition of license fees paid

The Dy CIT, Circle-4(1)(2), Ahmedabad vs. Vodafone West Limited, Ahmedabad

In the result, the appeal by the Revenue is partly allowed for statistical

ITA 1634/AHD/2015[2010-11]Status: DisposedITAT Mumbai11 Dec 2025AY 2010-11

Bench: Shri Vikram Singh Yadavshri Sandeep Singh Karhail

For Appellant: Shri K.K. VedFor Respondent: Shri Pankaj Kumar, CIT-DR
Section 142Section 143(2)Section 143(3)Section 144CSection 144C(5)Section 45Section 47Section 48Section 50D

enduring benefit, though the payments are recurring. Accordingly, the AO proposed to disallow the treatment of license fees paid during the year as revenue expenditure and, after appropriate deduction under section 35ABB of the Act, an amount of Rs. 172,48,44,119/- was proposed to be added ... case for the assessment year 2006-07, held that the license fees paid by the assessee on a revenue sharing basis are allowable as revenue expenditure deductible under section 37(1) of the Act. Accordingly, the learned DRP directed the AO to delete the proposed addition of license fees paid

Ct Educational Society, Jalandhar vs. DCIT, Chandigarh

In the result, the appeal filed by the Assessee is Partly Allowed for

ITA 396/CHANDI/2024[2016-17]Status: DisposedITAT Chandigarh10 Dec 2025AY 2016-17
For Appellant: Shri Ashray Sarna, CA(Virtual Mode)For Respondent: Shri Manav Bansal, CIT, DR
Section 11Section 12ASection 13(1)(c)Section 13(2)Section 143(2)Section 143(3)Section 2(15)Section 250

enclosed herewith. Madam, the amount of depreciation of Rs.6,93,68,150/- was not included while calculating utilization of amount on account of revenue expenditure and capital expenditure. Moreover, assessee society has utilized more funds then the receipts of the society so it is therefore requested that no adverse inference

Haryana Building and Other Construction Workers Welfare Board, Panchkula vs. DCIT, Exemption, Sector 17

In the result, this appeal of the Assessee stands dismissed

ITA 339/CHANDI/2023[2018-2019]Status: DisposedITAT Chandigarh10 Dec 2025AY 2018-2019
For Appellant: Sh. Nikhil Goyal, AdvocateFor Respondent: Sh. Manav Bansal, CIT DR
Section 263

under consideration i.e. A.Y. 2015- 16, the gross receipts were Rs.394,16,01,664/- out of which Rs.9,06,66,874/- were incurred as revenue expenditure and Rs.30,89,545/- were incurred as capital expenditure. Thus, total expenditure of the assessee was Rs.9,37,56,419/- which is 2.37% only

Haryana Building and Other Construction Workers Welfare Board, Panchkula vs. DCIT, Exemption, Chandigarh

In the result, this appeal of the Assessee stands dismissed

ITA 338/CHANDI/2023[2017-2018]Status: DisposedITAT Chandigarh10 Dec 2025AY 2017-2018

Bench: Shri Laliet Kumar & Shri Krinwant Sahay

For Appellant: Sh. Nikhil Goyal, AdvocateFor Respondent: Sh. Manav Bansal, CIT DR
Section 263

under consideration i.e. A.Y. 2015- 16, the gross receipts were Rs.394,16,01,664/- out of which Rs.9,06,66,874/- were incurred as revenue expenditure and Rs.30,89,545/- were 44 incurred as capital expenditure. Thus, total expenditure of the assessee was Rs.9,37,56,419/- which

Haryana Building and Other Construction Workers Welfare Board, Panchkula vs. CIT(Exemption), Chandigarh

In the result, this appeal of the Assessee stands dismissed

ITA 63/CHANDI/2021[2015-16]Status: DisposedITAT Chandigarh10 Dec 2025AY 2015-16

Bench: Shri Laliet Kumar & Shri Krinwant Sahay

For Appellant: Sh. Nikhil Goyal, AdvocateFor Respondent: Sh. Manav Bansal, CIT DR
Section 263

under consideration i.e. A.Y. 2015- 16, the gross receipts were Rs.394,16,01,664/- out of which Rs.9,06,66,874/- were incurred as revenue expenditure and Rs.30,89,545/- were incurred as capital expenditure. Thus, total expenditure of the assessee was Rs.9,37,56,419/- which is 2.37% only

Samastipur Kshetriya Gramin Bank, Patna vs. DCIT, Circle-3, Darbhanga

In the result, both the appeals of the assessee are partly allowed

ITA 34/PAT/2019[2012-13]Status: HeardITAT Patna09 Dec 2025AY 2012-13

Bench: Shri Duvvuru Rl Reddy, Vp & Shri Rajesh Kumar, Am

For Appellant: Shri Nishant Maitin, ARFor Respondent: Shri Md. AH Chowdhary, DR

account of provision for amortization of investment which according to the learned AO was of capital nature and could not be allowed as Revenue expenditure and accordingly, the same was disallowed and added to the income of the assessee. 3.2. In the appellate proceedings, the learned CIT (A) confirmed ... India. The assessee purchased the securities at a premium and amortized the same over the period of maturity and claimed the amount as revenue expenditure. In our considered view, the premium amortized on the purchase of securities by the assessee ITA Nos.33 & 34/PAT/2019 SamastipurKshetriya Gramin Bank

Samastipur Kshetriya Gramin Bank, Patna vs. DCIT, Circle-3, Darbhanga

ITA 33/PAT/2019[2011-12]Status: HeardITAT Patna09 Dec 2025AY 2011-12

Bench: Shri Duvvuru Rl Reddy, Vp & Shri Rajesh Kumar, Am

IN THE INCOME TAX APPELLATE TRIBUNAL “PATNA” BENCH, PATNA BEFORE SHRI DUVVURU RL REDDY, VP AND SHRI RAJESH KUMAR, AM

Deputy Commissioner of Income Tax, Central Circle 2(2), Chennai vs. Aadhitya Fincorp Pvt Ltd, Chennai

The appeal of the revenue is dismissed

ITA 659/CHNY/2025[2015-16]Status: DisposedITAT Chennai09 Dec 2025AY 2015-16

Bench: Shri Aby T Varkey & Shri S. R. Raghunatha

For Appellant: Ms. E. Pavuna Sundari, C.I.TFor Respondent: Ms. N. V. Lakshmi, Advocate
Section 132Section 132(4)Section 144Section 145(3)Section 153CSection 40A(3)Section 69A

which is violation of 40A(3)…..” It is brought to the kind attention of the department that share application money is not revenue expenditures that comes under the purview of 40A(3) disallowance, as these amounts are from the share application brought from the shareholders from time to time ... where payment exceeding Rs.20,000/- is made in cash, in contravention of the prescribed rules. The disallowance made under this section is restricted to revenue expenditures incurred by the assessee. Share application money, being a capital receipt, does not fall within the ambit of revenue expenditure. Therefore, the application

Vinayaka Education Trust, Nadiad vs. The DDIT, CPC, Bengaluru Juris. AO- the ITO, Exemption Ward, Vadodara

In the result, the appeal of the assessee stands allowed

ITA 1402/AHD/2025[2021-22]Status: DisposedITAT Ahmedabad05 Dec 2025AY 2021-22

Bench: Shri Sanjay Garg & Makarand V. Mahadeokar

For Appellant: Shri Chetan Shah, ARFor Respondent: Shri R.P. Rastogi, CIT-DR
Section 10Section 11Section 11(1)Section 11(1)(a)Section 12ASection 143(1)Section 154Section 250

assessee declared nil income after claiming exemption under section 11. It is on record that the assessee had incurred revenue expenditure of Rs.3,67,53,006 towards its charitable objects and had claimed accumulation under section 11(1)(a) amounting to Rs.59,97,501. 2.2 The return filed ... mentioned that “NO FORMS FILED". 8. Intimation passed U/s 143(1) is itself erroneous, as correct amount worked out in the Annexure Schedule ER (Revenue Expenditure) at Sl No F of Rs 36753006, which was mentioned ZERO in the calculation sheet at Sr No 4(i). 9. Your appellant craves

Trifecta Projects Private Limited, Bengaluru vs. DCIT, Central Circle-2(2), Bangalore

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

ITA 918/BANG/2025[2020-21]Status: DisposedITAT Bangalore05 Dec 2025AY 2020-21

Bench: Shri Prashant Maharishi, Vice – & Shri Soundararajan K.Assessment Year : 2020-21

For Appellant: Shri V. Srinivasan, AdvocateFor Respondent: Shri Subramanian .S, JCIT-DR
Section 132Section 143(1)Section 143(2)Section 153ASection 271ASection 274Section 37Section 40ASection 40A(3)

expenses u/s. 40A(3) of the Act since the payments were made in excess of Rs. 20,000/-. Similarly, the AO had added the revenue expenditure claimed by the assessee as capital expenditure. For the said additions, the assessee had accepted the said claims and paid the tax dues ... have undisclosed income. The assessee filed their detailed objections by citing that the disallowance of the cash expenses and the disallowance of the revenue expenditure could not be treated as undisclosed income since the said expenses were reflected in the financial statements of the assessee and therefore it could

Vaksons Metaplast Pvt Ltd, Delhi vs. PCIT(Central), Delhi

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

ITA 2218/DEL/2025[2019-20]Status: DisposedITAT Delhi05 Dec 2025AY 2019-20

Bench: Shris.Rifaur Rahman & Shri Anubhav Sharma

For Appellant: Smt. Rano Jain, AdvocateFor Respondent: Shri Amit Jain, CIT DR
Section 115BSection 132Section 139Section 143Section 153Section 153CSection 234ASection 263Section 69C

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 by itself would not be indicative of the fact that the Assessing Officer had not applied his mind on the issue. There ... Therefore, one has to see from the record as to whether there was application of mind before allowing the expenditure in question as revenue expenditure. Learned counsel for the assessee is right in his submission that one has to keep in mind the distinction between "lack of inquiry" and "inadequate

Vaksons Metaplast Pvt Ltd, Delhi vs. PCIT(Central), Delhi

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

ITA 2217/DEL/2025[2018-19]Status: DisposedITAT Delhi05 Dec 2025AY 2018-19

Bench: Shris.Rifaur Rahman & Shri Anubhav Sharma

For Appellant: Smt. Rano Jain, AdvocateFor Respondent: Shri Amit Jain, CIT DR
Section 115BSection 132Section 139Section 143Section 153Section 153CSection 234ASection 263Section 69C

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 by itself would not be indicative of the fact that the Assessing Officer had not applied his mind on the issue. There ... Therefore, one has to see from the record as to whether there was application of mind before allowing the expenditure in question as revenue expenditure. Learned counsel for the assessee is right in his submission that one has to keep in mind the distinction between "lack of inquiry" and "inadequate

Vaksons Metaplast Pvt Ltd, Delhi vs. PCIT(Central), Delhi

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

ITA 2216/DEL/2025[2017-18]Status: DisposedITAT Delhi05 Dec 2025AY 2017-18

Bench: Shris.Rifaur Rahman & Shri Anubhav Sharma

For Appellant: Smt. Rano Jain, AdvocateFor Respondent: Shri Amit Jain, CIT DR
Section 115BSection 132Section 139Section 143Section 153Section 153CSection 234ASection 263Section 69C

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 by itself would not be indicative of the fact that the Assessing Officer had not applied his mind on the issue. There ... Therefore, one has to see from the record as to whether there was application of mind before allowing the expenditure in question as revenue expenditure. Learned counsel for the assessee is right in his submission that one has to keep in mind the distinction between "lack of inquiry" and "inadequate

Starkey Laboratories India Pvt. Ltd., Noida vs. DCIT Circle-24(2), New Delhi

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

ITA 3205/DEL/2023[2016-17]Status: DisposedITAT Delhi05 Dec 2025AY 2016-17

Bench: Shri Yogesh Kumar U.S. & Shri Manish Agarwalstarkey Laboratories Dy. Cit, India Pvt. Ltd., Circle-24(2), C-2, Sector-7, Vs. New Delhi. Gautam Buddha Nagar-201301, Uttar Pradesh. Pan-Aakcs6072R (Appellant) (Respondent)

Section 143(3)Section 250Section 250(1)(b)Section 37(1)Section 92C

discount expenses were created in respect of liabilities accrued during the relevant financial year (F.Y. 2015-16) and are in the nature of revenue expenditure. Therefore, such provisions are allowable under Section 37(1) of the Act, being expenditure laid out wholly and exclusively for the purposes of business ... Section 145 of the Income-tax Act, 1961, duly recognized these expenses on accrual basis. Accordingly. the said provisions, being in the nature of revenue expenditure incurred wholly and exclusively for the purposes of business, are allowable under Section 37(1) of the Act. Contingent liability has been defined

Deputy Commissioner of Income Tax, Bengaluru vs. Flipkart India Pvt Ltd, Bengaluru

In the result, both the appeals filed by the Revenue are dismissed

ITA 1395/BANG/2025[2021-22]Status: DisposedITAT Bangalore04 Dec 2025AY 2021-22

Bench: Shri Prashant Maharishi & Shri Keshav Dubey

For Appellant: Shri Shivanand Kalakeri, CIT(DR)(ITAT), BengaluruFor Respondent: Shri Ajay Vohra, Sr. Advocate
Section 143(3)Section 37

with the arguments that even assuming that expenditure was incurred by the Assessee the expenditure for building brand or creating intangible or goodwill is revenue expenditure and allowable as deduction. It is also not necessary for us to go into the question of estimation of quantum of expenditure on creating ... taxmann.com 335 and other connected appeals, by order dated 16-7-2013, wherein it was held that expenditure on account of ESOP is a revenue expenditure and had to be allowed as deduction while computing income. The Special Bench held that the sole object of issuing shares to employees