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“enduring benefit”

Business ExpensesSection 37Section 371,056 judgments

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

Leading authorities on enduring benefit

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.

CIT v. De Beers India Minerals (P.) Ltd.
346 ITR 467 · 2012 · High Court
371
citing judgments

For fees for technical or consultancy services to 'make available' technical knowledge or know-how under a DTAA, the service must transmit such knowledge, allowing the recipient to derive an enduring benefit and utilize it independently in the future.

Eastern Investments Ltd. v. CIT
38 ITR 601 · 1960 · Supreme Court
346
citing judgments

Expenditure must be commercially expedient for carrying on the business, and it is not for revenue authorities to dictate how an assessee should conduct its business. The court will not question the business expediency of a transaction, even if a third party also benefits.

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.

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.

CIT v. Madras Auto Service (P) Ltd.
233 ITR 468 · 1998 · Supreme Court
246
citing judgments

Expenditure providing an enduring advantage, such as upfront lease rent for land, is revenue expenditure if no capital asset is acquired or generated, allowing for deduction under Section 37, even when capitalized in the books of account.

Brooke Bond India Ltd. v. CIT
225 ITR 798 · 1997 · Supreme Court
228
citing judgments

Expenditure incurred for increasing a company's share capital or expanding its capital base, such as expenses related to the issue of shares, constitutes capital expenditure. Such expenses are not deductible as revenue expenditure under Section 37(1) of the Income-tax Act, 1961, even if they incidentally benefit the business.

Judgments citing enduring benefit

Marico Ltd, Mumbai vs. DCIT Cen Cir-35, Mumbai

ITA 7044/MUM/2008[2005-2006]Status: DisposedITAT Mumbai11 Apr 2025AY 2005-2006

Bench: Shri Pawan Singh, Jm & Ms Padmavathy S, Am

Section 115JSection 80HSection 80I

recall the Assessing Officer does not dispute that the expenditure was capital in nature since by making such expenditure, the assessee had acquired certain enduring benefits. He was, however, of the opinion that to claim depreciation, the assessee must satisfy the requirement of Section ... confidential information which would include the past and current plan, operation of the existing business, trade secretes lists etc. agreement not only give enduring benefit, protected the assessee's business against competence, that too from a person who had closely worked with the assessee in the same business. The expression

M/S. Marico Ltd, Mumbai vs. The ACIT Cen Cir-35, Mumbai

ITA 3533/MUM/2008[2004-2005]Status: DisposedITAT Mumbai11 Apr 2025AY 2004-2005

Bench: Shri Pawan Singh, Jm & Ms Padmavathy S, Am

Section 115JSection 80HSection 80I

recall the Assessing Officer does not dispute that the expenditure was capital in nature since by making such expenditure, the assessee had acquired certain enduring benefits. He was, however, of the opinion that to claim depreciation, the assessee must satisfy the requirement of Section ... confidential information which would include the past and current plan, operation of the existing business, trade secretes lists etc. agreement not only give enduring benefit, protected the assessee's business against competence, that too from a person who had closely worked with the assessee in the same business. The expression

The ACIT CC-35, Mumbai vs. M/S. Marico Ltd, Mumbai

ITA 3152/MUM/2008[2004-2005]Status: DisposedITAT Mumbai11 Apr 2025AY 2004-2005

Bench: Shri Pawan Singh, Jm & Ms Padmavathy S, Am

Section 115JSection 80HSection 80I

recall the Assessing Officer does not dispute that the expenditure was capital in nature since by making such expenditure, the assessee had acquired certain enduring benefits. He was, however, of the opinion that to claim depreciation, the assessee must satisfy the requirement of Section ... confidential information which would include the past and current plan, operation of the existing business, trade secretes lists etc. agreement not only give enduring benefit, protected the assessee's business against competence, that too from a person who had closely worked with the assessee in the same business. The expression

Deputy Commissioner of Income Tax, C.R. Builiding, New Delhi vs. Jade E-Services Private Limited, Delhi

In the result, the appeal filed by the Revenue stands dismissed

ITA 2020/DEL/2024[2018-19]Status: DisposedITAT Delhi09 Apr 2025AY 2018-19

Bench: Shri Shamim Yahya & Shri Sudhir Pareek

For Appellant: Shri Udit Jain, Adv. & Shri ArihantFor Respondent: Shri Dayainder Singh Sidhu
Section 142Section 143(2)Section 143(3)

maintenance) expenses to the tune of Rs. 18,34,46,839/- (i.e. half of Rs. 36,68,93,477/-) as capital in nature being enduring benefit of assessee and disallowed as 50% of revenue expenditure claimed by the assessee and treated as capital expenditure. 3. Upon assessee’s appeal ... capital in nature has to be made of certain basis. Further, the appellant emphasis that these are revenue expense and they had no enduring benefits. As per appellant these expenses were in nature of revenue expenses being recurring in nature and also provided rational as mentioned in above para. These

Fine Blanking Private Limited, Hubballi vs. Income Tax Officer, Ward-1(1) & Tps, Hubli

In the result, the appeal of the assessee is dismissed

ITA 77/BANG/2025[2012-13]Status: DisposedITAT Bangalore02 Apr 2025AY 2012-13

Bench: Shri Laxmi Prasad Sahu & Shri Keshav Dubeyassessment Year : 2012-13

For Appellant: Shri Vinay Kulkarni, CAFor Respondent: Ms. Neha Sahay, Jt.CIT(DR)(ITAT), Bengaluru
Section 37Section 40

main machinery to its original condition and it increased the capacity of the main machine from the present condition and got advantage of enduring benefit due to replacement of such component. The Expenditure has been incurred to preserve and maintain the main machinery and that is why the machine ... working capacity of the machine, the assessee has incurred expenditure. Therefore, it cannot be said that it is a revenue expenditure which gives enduring benefit to the assessee. The judgment relied by the ld. DR noted supra, the relevant part of the judgement is clearly applicable in the present facts

Prerna Agency Pvt Ltd, Kolkata vs. Income Tax Officer, Ward 2(1), Patna

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

ITA 285/PAT/2023[2013-2014]Status: DisposedITAT Patna26 Mar 2025AY 2013-2014

Bench: Shri Rajesh Kumar&Shri Pradip Kumar Choubey]

Section 143(2)Section 143(3)Section 147Section 148Section 151

course along with applicable market rate of interest and thus, no benefit has ultimately flown to the assessee in terms of any permanent or enduring benefit.” 10. The above reply clearly reveals that the assessee has taken loan for FY 2012-13 in the ordinary course of business which were

Jsw Energy Limited, Mumbai vs. The Assistant Commissioner of Income Tax, Central Circle 8(3), Mumbai

In the result, both the appeals are allowed partly for statistical

ITA 3714/MUM/2024[2020-21]Status: DisposedITAT Mumbai26 Mar 2025AY 2020-21

Bench: Shri Om Prakash Kant () & Ms. Kavitha Rajagopal ()

For Appellant: Mr. Gaurav KabraFor Respondent: Ms. Neena Jeph, CIT-DR/
Section 115JSection 14ASection 37Section 80I

purpose of business and not to be capital or personal in nature. The Ld. DR submitted that the expenditure was intended for enduring benefit purposes and hence capital in nature because the assessee was evaluating new business opportunity aimed to create long term benefit for the business ... that would result in the acquisition of low (CV) coal which would direct impact on increasing profitability and thus the expenditure confers upon the enduring benefit to the assessee's trade for securing long term advantage by reducing operational costs and therefore, such expenditure was aimed as creating enduring benefit

Linguanext Technologies Private Limited, Pune vs. ITO Ward 14(3), Pune

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

ITA 2535/PUN/2024[2014-15]Status: DisposedITAT Pune20 Mar 2025AY 2014-15

Bench: Shri Manish Borad & Shri S. S. Viswanethra Raviआयकर अपील सं. / Ita No.2535/Pun/2024 िनधा"रण वष" / Assessment Year : 2014-15 Linguanext Technologies Vs. Ito, Ward-14(3), Pune. Private Limited, 401, Galore Tech Park, Behind Maratha Mandir, Bavdhan, Pune- 411021. Pan : Aabcl7322G Appellant Respondent Assessee By : Shri Kishore Phadke Revenue By : Shri Manoj Tripathi Date Of Hearing : 17.03.2025 Date Of Pronouncement : 20.03.2025 आदेश / Order Per Manish Borad, Am: This Appeal Filed At The Instance Of Assessee Is Directed Against The Order Of Ld. Addl/Jcit(A)-6, Chennai [‘Ld. Cit(A)’] Dated 19.11.2024 Which Is Arising Out Of The Assessment Order U/S 143(3) Of The Act For Assessment Year 2014-15 Framed On 29.12.2016 By The Ito, Ward-14(3), Pune. 2. Brief Facts Of The Case Are That The Assessee Is A Private Limited Company & Engaged In Software Development Business. Return

For Appellant: Shri Kishore PhadkeFor Respondent: Shri Manoj Tripathi
Section 143(2)Section 143(3)Section 14ASection 37(1)

other sale. We also observe that no new asset came into existence and the expenditure is customer specific and has no enduring benefit. Further, the intention of the expenditure is to facilitate sales and not develop software. Therefore, since the alleged expenditure towards translation expenses for software development has been

Assistant Commissioner of Income Tax, Central Circle-1, Trichy vs. Vijay Dairy and Farm Products Private Limited, Musiri, Trichy

In the result, appeal filed by the Revenue is dismissed

ITA 483/CHNY/2024[2019-20]Status: DisposedITAT Chennai19 Mar 2025AY 2019-20

Bench: Shri Aby T. Varkey & Shrimanoj Kumar Aggarwal

For Appellant: Mr. N. Arjun Raj, AdvocateFor Respondent: Mr. Nilay Baran Som, CIT
Section 133ASection 143(3)Section 69A

bringing expenditure is made not only once and for all, but with a view to bringing into existence or an advantage for which enduring benefit of a trade, the into existence or an advantage for which enduring benefit of a trade, the into existence or an advantage for which enduring ... There may be cases where expenditure, even if incurred for obtaining "There may be cases where expenditure, even if incurred for obtaining advantage, of enduring benefit, may, none advantage, of enduring benefit, may, none-the-less, be on revenue less, be on revenue account and the test of enduring benefit

M/S. Indo National Limited, Chennai vs. ACIT, Corp Cricle -2(2). Chennai, Chennai

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

ITA 1405/CHNY/2023[2016-17]Status: DisposedITAT Chennai19 Mar 2025AY 2016-17

Bench: Shri Aby T. Varkey & Shrimanoj Kumar Aggarwal

Section 35

Rajendra Prasad was made with its promoter director ShriKunal K.Jiwarka and Mr. Rajendra Prasad Khaitan.(Such payment would fallunder the nature of enduring benefit. The Khaitan.(Such payment would fallunder the nature of enduring benefit. The Khaitan.(Such payment would fallunder the nature of enduring benefit. The appellant avoided competitionwi ... taxmann.com 208 (Delhi) (2017) GKN Driveline India Ltd. vs. CIT 88 taxmann.com 208 (Delhi) (2017)- Payments were held for an enduring benefit and not non Payments were held for an enduring benefit and not non-competeobligation competeobligation regarding agreement for regarding agreement for purchase of assets and liabilitiesof

M/S. Indo National Limited, Chennai vs. ACIT Coprate Cricle-2(2), Chennai

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

ITA 1404/CHNY/2023[2015-16]Status: DisposedITAT Chennai19 Mar 2025AY 2015-16

Bench: Shri Aby T. Varkey & Shrimanoj Kumar Aggarwal

Section 35

Rajendra Prasad was made with its promoter director ShriKunal K.Jiwarka and Mr. Rajendra Prasad Khaitan.(Such payment would fallunder the nature of enduring benefit. The Khaitan.(Such payment would fallunder the nature of enduring benefit. The Khaitan.(Such payment would fallunder the nature of enduring benefit. The appellant avoided competitionwi ... taxmann.com 208 (Delhi) (2017) GKN Driveline India Ltd. vs. CIT 88 taxmann.com 208 (Delhi) (2017)- Payments were held for an enduring benefit and not non Payments were held for an enduring benefit and not non-competeobligation competeobligation regarding agreement for regarding agreement for purchase of assets and liabilitiesof

Shell International Petroeum Company Limited, Mumbai vs. Asst. Commissioner of Income Tax(International Taxation)-4(2)(1), Mumbai

ITA 5509/MUM/2017[2014-15]Status: DisposedITAT Mumbai27 Feb 2025AY 2014-15

Bench: Ms Padmavathy S, Am & Shri Raj Kumar Chauhan, Jm

Section 143(3)Section 234ASection 271(1)(c)

like. The service should be aimed at and result in transmitting technical knowledge, etc., so that the payer of the service could derive an enduring benefit and utilize the knowledge or know-how on his own in future without the aid of the service provider. In other words

Shell International Petroleum Company Ltd, Mumbai vs. DCIT (It) 4(2)(1), Mumbai

ITA 3053/MUM/2017[2012-13]Status: DisposedITAT Mumbai27 Feb 2025AY 2012-13

Bench: Ms Padmavathy S, Am & Shri Raj Kumar Chauhan, Jm

Section 143(3)Section 234ASection 271(1)(c)

like. The service should be aimed at and result in transmitting technical knowledge, etc., so that the payer of the service could derive an enduring benefit and utilize the knowledge or know-how on his own in future without the aid of the service provider. In other words

Shell International Petroleum Company Ltd, Mumbai vs. DCIT (It) 4(2)(1), Mumbai

ITA 3049/MUM/2017[2013-14]Status: DisposedITAT Mumbai27 Feb 2025AY 2013-14

Bench: Ms Padmavathy S, Am & Shri Raj Kumar Chauhan, Jm

Section 143(3)Section 234ASection 271(1)(c)

like. The service should be aimed at and result in transmitting technical knowledge, etc., so that the payer of the service could derive an enduring benefit and utilize the knowledge or know-how on his own in future without the aid of the service provider. In other words

DCIT CC 4 2 Mumbai, Mumbai vs. Red Chillies Entertainments Pvt. Ltd., Mumbai

In the result, appeal filed by the Revenue is dismissed and Cross Objection filed by the assessee is allowed

ITA 5831/MUM/2024[2012-13]Status: DisposedITAT Mumbai21 Feb 2025AY 2012-13

Bench: SHRI AMIT SHUKLA (Judicial Member), MS. PADMAVATHY S (Accountant Member)

Section 143(3)Section 147Section 148Section 151Section 40

like. The service should be aimed at and result in transmitting technical knowledge, etc, so that the prayer of the service could derive on enduring benefit and utilize the knowledge or know-how on his own in future without the aid of the service provider. In other words

Amit Kumar, Panipat Haryana vs. DCIT, NFAC (Delhi)

ITA 193/DEL/2024[2017-18]Status: DisposedITAT Delhi20 Feb 2025AY 2017-18

Bench: Shri Anubhav Sharma & Shri Amitabh Shukla

Section 143(3)

expenses so incurred were capital expenses.” 9.2 The ld. AR has submitted that a long-term advantage cannot be considered to be of enduring benefit acquired by the assessee to hold the expenses were capital in nature. Reliance was placed on the decision of the Hon’ble Supreme Court ... considered view that the ld.CIT(A) has fallen in error in considering the nature of services to be giving or extending enduring benefit and by paying compensation amount, the appellant availed a profit making apparatus. As we consider the nature of services reproduced above being part of Annexure- A appended

Anand Singh, Village Shahpur Turk vs. Income Tax Officer 69(5), Delhi

In the result, the appeal of the Assessee are allowed

ITA 1022/DEL/2024[2012-13]Status: DisposedITAT Delhi20 Feb 2025AY 2012-13

Bench: Shri M. Balaganesh & Shri Vimal Kumarbombardier Inc, Vs. Acit, 400, Dorval, Cote-Vertu, Circle-1(1)(2), Road West, Quebee Delhi Canada-H4S1Y9 (Appellant) (Respondent) Pan: Aaccb7177J Assessee By : Shri Sriram Seshadri, Cas Shri Varun Jain, Ca Shri Mohit Agarwal, Ca Ms. Amulya K. Ca Revenue By: Shri M. S. Nethrapal, Cit Dr Date Of Hearing 15/09/2025 Date Of Pronouncement 10/12/2025

For Appellant: Shri Sriram Seshadri, CAsFor Respondent: Shri M. S. Nethrapal, CIT DR
Section 144C(5)Section 147Section 9(1)(vii)

like. The service should be aimed at and result in transmitting technical knowledge, etc., so that the payer of the service could derive an enduring benefit and utilize the knowledge or know-how on his own in future without the aid of the service provider. In other words ... transfer of a technical plan or technical design but also deals with imparting experience and skill. Within the make available clause itself the enduring benefit would be different for all the items mentioned in it for example the enduring benefit of a technical design or know-how cannot be same

Ags Transact Technologies Limited, Mumbai vs. DCIT Circle 6(1)(1), Aayakar Bhavan Mumbai

ITA 4653/MUM/2024[2020-2021]Status: DisposedITAT Mumbai17 Feb 2025AY 2020-2021

Bench: Shri Om Prakash Kant () & Shri Rahul Chaudhary () Assessment Year: 2020-21 Ags Transact Technologies Dcit Circle 6(1)(1), Ltd., Aayakar Bhavan, Vs. 601-602, Trade World, B Wing Mumbai-400020. S.B. Marg, Lower Parel, Mumbai-400013. Pan No. Aaeca 0901 H Appellant Respondent

For Appellant: Mr. Dalpat ShahFor Respondent: 04/12/2024

hence the Legal by the SEBI approved the due date of 04.10.2019 and hence the Legal and Filing Cost was allowable U/sec 37 no enduring benefit has and Filing Cost was allowable U/sec 37 no enduring benefit has and Filing Cost was allowable U/sec 37 no enduring benefit has accrued ... nature of enduring for raising equity share capital were in the nature of enduring for raising equity share capital were in the nature of enduring benefit spread over the future for long period of time. The Assessing the future for long period of time. The Assessing the future for long

Bajaj Holdings & Investment Ltd ( Formerly Bajaj Auto Ltd), Mumbai vs. ACIT Ltu, Mumbai

ITA 5299/MUM/2010[2006-07]Status: DisposedITAT Mumbai17 Feb 2025AY 2006-07
Section 143(3)

Software Purchased has been correctly classified as capital expenditure by the Assessing Officer and the CIT(A) since the same is resulting in enduring benefit to the Assessee. Further, the Assessee has failed to clarify whether the new software purchased is operating software or application software. 9. 6. We have

Bajaj Holdings & Investments Ltd ( Formerly Known As Bajaj Auto Ltd), Mumbai vs. Addl CIT RG 3(1), Mumbai

The appeals are partly allowed

ITA 6838/MUM/2008[2004-2005]Status: DisposedITAT Mumbai17 Feb 2025AY 2004-2005

Bench: SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY (Judicial Member)

For Appellant: Ms. Vasanti PatelFor Respondent: Shri Ankush Kapoor
Section 143(3)

Software Purchased has been correctly classified as capital expenditure by the Assessing Officer and the CIT(A) since the same is resulting in enduring benefit to the Assessee. Further, the Assessee has failed to clarify whether the new software purchased is operating software or application software. 9.6. We have given