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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

Ircon International Ltd., New Delhi vs. Addl.CIT, Special Range- 4, New Delhi

In the result, the appeal of the assessee on this ground is allowed

ITA 7155/DEL/2017[2013-14]Status: DisposedITAT Delhi28 Jan 2022AY 2013-14

Bench: Sh. A. D. Jaindr. B. R. R. Kumar

For Appellant: Sh. Rakesh Gupta, Adv. &For Respondent: Ms. Meenakshi J. Goswami, CIT(DR)
Section 801ASection 80I

evident that these expenses are regular business expenses which are incidental to the business of the assessee and in no way provide any enduring benefit to the assessee. Therefore, applying the ratio laid down by the Hon’ble Supreme Court in the case of M/s Empire Jute

Ircon International Ltd., New Delhi vs. Addl. CIT, Circle-12(2), New Delhi

In the result, the appeal of the assessee on this ground is allowed

ITA 5460/DEL/2017[2012-13]Status: DisposedITAT Delhi28 Jan 2022AY 2012-13

Bench: Sh. A. D. Jaindr. B. R. R. Kumar

For Appellant: Sh. Rakesh Gupta, Adv. &For Respondent: Ms. Meenakshi J. Goswami, CIT(DR)
Section 801ASection 80I

evident that these expenses are regular business expenses which are incidental to the business of the assessee and in no way provide any enduring benefit to the assessee. Therefore, applying the ratio laid down by the Hon’ble Supreme Court in the case of M/s Empire Jute

DCIT, New Delhi vs. M/S. Ircon International Ltd., New Delhi

In the result, the appeal of the assessee on this ground is allowed

ITA 528/DEL/2013[2007-08]Status: DisposedITAT Delhi28 Jan 2022AY 2007-08

Bench: Sh. A. D. Jaindr. B. R. R. Kumar

For Appellant: Sh. Rakesh Gupta, Adv. &For Respondent: Ms. Meenakshi J. Goswami, CIT(DR)
Section 801ASection 80I

evident that these expenses are regular business expenses which are incidental to the business of the assessee and in no way provide any enduring benefit to the assessee. Therefore, applying the ratio laid down by the Hon’ble Supreme Court in the case of M/s Empire Jute

Velankani Information Systems Limited, Bangalore vs. The Deputy Commissioner of Income Tax Circle-7(1)(2), Bangalore

In the result, the appeal by the assessee is dismissed

ITA 156/BANG/2017[2010-11]Status: DisposedITAT Bangalore20 Jan 2022AY 2010-11

Bench: Shri N V Vasudevan & Shri Chandra Poojariassessment Year: 2010-11

For Appellant: Shri Sudhir Prabhu, CAFor Respondent: Shri Sankarganesh, Jt.CIT(DR)(ITAT), Bengaluru
Section 30Section 37Section 37(1)

construction of hotel building to procure the materials. The construction of hotel building is in the capital field and that construction has resulted in enduring benefit to the assessee. The primary condition for allowing expenditure u/s. 37(1) should be in the revenue field. However, in the present case

Security Printing & Minting Corporation of India Ltd., New Delhi vs. Addl. CIT, Range- 8, New Delhi

In the result, the appeal of the assessee is allowed

ITA 475/DEL/2018[2011-12]Status: DisposedITAT Delhi18 Jan 2022AY 2011-12

Bench: Sh. Amit Shukladr. B. R. R. Kumar(Through Video Conferencing)

For Appellant: Sh. Y. K. Maghan, CAFor Respondent: Sh. H. K. Choudhary, CIT DR
Section 10(34)Section 143(3)Section 14ASection 263Section 40

been enclosed which has been duly perused. The AO disallowed this claim taking a view that the expenditure incurred are capital nature and are enduring benefit to assessee. 13. During appellate proceedings, it was submitted that explanation 2 to section 37(1) of Income Tax Act 1961 was inserted

Dy CIT Central Cir-2(3), Mumbai vs. Amit Avinash Bhosale, Pune

In the result, appeal filed by the Revenue for the A

ITA 166/MUM/2021[2015-16]Status: DisposedITAT Mumbai11 Jan 2022AY 2015-16

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Pavan Kumar Gadale, Hon'Ble

For Appellant: Shri Vijay MehtaFor Respondent: Ms. Shailja Rai
Section 10(38)Section 127(2)Section 132Section 153A

having life of short duration which require continuous up-gradation due to new technology introduced from time to time and not having long term enduring benefit were required to be treated as revenue in nature. He, in this respect, has relied upon the decision of the coordinate bench of this ... treated as revenue in nature until and unless it is established that the software installed has a very long lasting life and enduring benefit on a capital asset. The relevant observations made by the Tribunal in para 12 of the said decision, for the sake of convenience, are reproduced

Dy. CIT CC- 2(3), Mumbai vs. Amit Avinash Bhosale, Pune

In the result, appeal filed by the Revenue for the A

ITA 165/MUM/2021[2018-19]Status: DisposedITAT Mumbai11 Jan 2022AY 2018-19

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Pavan Kumar Gadale, Hon'Ble

For Appellant: Shri Vijay MehtaFor Respondent: Ms. Shailja Rai
Section 10(38)Section 127(2)Section 132Section 153A

having life of short duration which require continuous up-gradation due to new technology introduced from time to time and not having long term enduring benefit were required to be treated as revenue in nature. He, in this respect, has relied upon the decision of the coordinate bench of this ... treated as revenue in nature until and unless it is established that the software installed has a very long lasting life and enduring benefit on a capital asset. The relevant observations made by the Tribunal in para 12 of the said decision, for the sake of convenience, are reproduced

Dy CIT CC-2(3), Mumbai vs. Avinash Nivrutti Bhosale, Pune

In the result, appeal filed by the Revenue for the A

ITA 123/MUM/2021[2015-16]Status: DisposedITAT Mumbai11 Jan 2022AY 2015-16

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Pavan Kumar Gadale, Hon'Ble

For Appellant: Shri Vijay MehtaFor Respondent: Ms. Shailja Rai
Section 10(38)Section 127(2)Section 132Section 153A

having life of short duration which require continuous up-gradation due to new technology introduced from time to time and not having long term enduring benefit were required to be treated as revenue in nature. He, in this respect, has relied upon the decision of the coordinate bench of this ... treated as revenue in nature until and unless it is established that the software installed has a very long lasting life and enduring benefit on a capital asset. The relevant observations made by the Tribunal in para 12 of the said decision, for the sake of convenience, are reproduced

M/S. Lg Soft India Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle- 4(1)(1), Bangalore

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

ITA 451/BANG/2020[2012-13]Status: DisposedITAT Bangalore06 Jan 2022AY 2012-13

Bench: Shri George George K, Jm & Shri B.R.Baskaran, Am

For Appellant: Sri.K.R.Vasudevan, AdvocateFor Respondent: Sri.Nischal B, Addl.CIT-DR
Section 143(3)Section 154Section 32

expenses incurred under software development as capital in nature. c)The learned CIT(A) erred in concluding that the software development expenses provides enduring benefit to the Appellant without fully appreciating the facts of the case. The Appellant craves leave to add, alter, rescind and modify the grounds herein above ... nature (para 4.1 of the assessment order). 5.1 On further appeal, the CIT(A) sustained the disallowance stating that the software development expenses provides enduring benefit and treated the same as a capital 8 M/s.LG Soft India Private Limited expenditure. The CIT(A) directed the A.O. to allow depreciation

Deputy Commissioner of Income Tax Circle-7(1)(1), Bangalore vs. M/S Thought Works Technologies India Private Limited, Bangalore

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

ITA 590/BANG/2019[2012-13]Status: HeardITAT Bangalore04 Jan 2022AY 2012-13

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

For Appellant: Sri.V.Sridhar, CAFor Respondent: Sri.Jairam Raipura, CIT-DR
Section 143(3)Section 43A

assets would be consumed by the assessee company? b. The CIT(A) erred in not considering that the expenses incurred towards assets which have enduring benefit should be treated as capital expenditure. c. The CIT(A) erred in treating the leased rentals expenses as revenue in nature and dismissing assessee

Thoughtworks Technologies (India) Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle -7(1)(1), Bangalore

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

ITA 580/BANG/2019[2012-13]Status: HeardITAT Bangalore04 Jan 2022AY 2012-13

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

For Appellant: Sri.V.Sridhar, CAFor Respondent: Sri.Jairam Raipura, CIT-DR
Section 143(3)Section 43A

assets would be consumed by the assessee company? b. The CIT(A) erred in not considering that the expenses incurred towards assets which have enduring benefit should be treated as capital expenditure. c. The CIT(A) erred in treating the leased rentals expenses as revenue in nature and dismissing assessee

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)

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 and the computerisation of branches has merely facilitated smooth running banking operations. 10. The learned ... 6/2/2015 13 7 — 9 34 — 12/6/2015 35 16. With regard to the argument of the lower authorities that the assessee obtained an enduring benefit, it was submitted that it is important to bear in mind that what is required to be seen is not whether the advantage obtained lasts forever

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)

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 and the computerisation of branches has merely facilitated smooth running banking operations. 10. The learned ... 6/2/2015 13 7 — 9 34 — 12/6/2015 35 16. With regard to the argument of the lower authorities that the assessee obtained an enduring benefit, it was submitted that it is important to bear in mind that what is required to be seen is not whether the advantage obtained lasts forever

M/S Orkla Asia Pacific Pte Ltd, Bangalore vs. Deputy Commissioner of Income Tax (It) Circle-2(1), Bangalore

In the result, the appeal of the assessee stands allowed

ITA 193/BANG/2019[2015-16]Status: DisposedITAT Bangalore30 Dec 2021AY 2015-16

Bench: Shri. B.R. Baskaran & Smt. Beena Pillaiassessment Year : 2015-16 M/S. Orkla Asia Pacific Pte Ltd., The Deputy C/O Mtr Foods Pvt. Ltd., Commissioner Of No. 1, 2Nd & 3Rd Floor, Income Tax (It), 100 Feet Inner Ring Road, Asmnt, Circle – 2(1), Ejipura, Vs. Bangalore. Bangalore – 560 047. Pan: Aabco4087B Appellant Respondent Assessee By : Shri Sharath Rao, Advocate : Shri Pradeep Kumar, Cit Revenue By (Dr) Date Of Hearing : 03-11-2021 Date Of Pronouncement : 30-12-2021 Order Per Beena Pillaipresent Appeal Is Filed By Assessee Against Final Assessment Order Dated 17/12/2018 Passed U/S. 143 (3) By The Ld.Dcit, Asmnt, Circle-2(1), Bangalore For Assessment Year 2015-16 On Following Grounds Of Appeal: “The Grounds Mentioned Hereinafter Are Without Prejudice To One Another. 1. Barred By Limitation The Order Passed By The Learned Assessing Officer ('Learned Ao') Is Barred By Limitation In View Of The Express Provisions Of Section 144C(13) Of The Income-Tax Act, 1961 ('The Act') Wherein, The Order Should Be Passed Within One Month From The End Of The Month In Which Dispute

For Appellant: Shri Sharath Rao, Advocate
Section 143Section 144C(13)Section 234ASection 234BSection 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

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

Section 14ASection 234BSection 37(1)

expenses incurred abroad markets for Developing market for the Product Dolenio.,” 5. The Ld.DR on the contrary, argued that these payments have brought in enduring benefit to assessee and therefore cannot be treated to be revenue expenditure. He relied on the order passed by the Ld.AO. We have perused ... 1255/Bang/2019 related expenses. These expenses are related to registration of patent and trade mark, relevant taxes on registered patent/trademark. These expenses have enduring benefit for more than one year. The Patent / trade mark registered is intangible asset of the company. Registration expenses of the product/patent and relevant taxes paid

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

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

Section 14ASection 234BSection 37(1)

expenses incurred abroad markets for Developing market for the Product Dolenio.,” 5. The Ld.DR on the contrary, argued that these payments have brought in enduring benefit to assessee and therefore cannot be treated to be revenue expenditure. He relied on the order passed by the Ld.AO. We have perused ... 1255/Bang/2019 related expenses. These expenses are related to registration of patent and trade mark, relevant taxes on registered patent/trademark. These expenses have enduring benefit for more than one year. The Patent / trade mark registered is intangible asset of the company. Registration expenses of the product/patent and relevant taxes paid

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

ITA 1255/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

Section 14ASection 234BSection 37(1)

expenses incurred abroad markets for Developing market for the Product Dolenio.,” 5. The Ld.DR on the contrary, argued that these payments have brought in enduring benefit to assessee and therefore cannot be treated to be revenue expenditure. He relied on the order passed by the Ld.AO. We have perused ... 1255/Bang/2019 related expenses. These expenses are related to registration of patent and trade mark, relevant taxes on registered patent/trademark. These expenses have enduring benefit for more than one year. The Patent / trade mark registered is intangible asset of the company. Registration expenses of the product/patent and relevant taxes paid

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

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

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

Section 14ASection 234BSection 37(1)

expenses incurred abroad markets for Developing market for the Product Dolenio.,” 5. The Ld.DR on the contrary, argued that these payments have brought in enduring benefit to assessee and therefore cannot be treated to be revenue expenditure. He relied on the order passed by the Ld.AO. We have perused ... 1255/Bang/2019 related expenses. These expenses are related to registration of patent and trade mark, relevant taxes on registered patent/trademark. These expenses have enduring benefit for more than one year. The Patent / trade mark registered is intangible asset of the company. Registration expenses of the product/patent and relevant taxes paid

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

glass. Fixing cabin doors. ix. Putting false ceiling of 12 mm gypsum board sheets fixed... x. According to the AO, the expenditure would give enduring benefit and not a temporary one. The expenditure is part of setting up of a business or a new unit of business. To test ... expenses as temporary and it is not giving any enduring benefit, the AO called upon the Assessee to furnish the details of all the premises used for the business purpose and the details of expenses incurred in leasehold improvements for the same. The Details provided by the assessee is reproduced

M/S Kottaram Agro Foods Pvt Ltd, Bangalore vs. The Deputy Commissioner of Income Tax Circle-4(1)(1), Bangalore

In the result, both the appeals filed by the assessee are treated as allowed for statistical purposes

ITA 2853/BANG/2018[2015-16]Status: DisposedITAT Bangalore28 Dec 2021AY 2015-16

Bench: Shri George George K. & Shri B.R. Baskaranassessment Year: 2014-15

For Appellant: Smt. Jeenitha Chatarjee, A.RFor Respondent: Capt. Pradeep Shoury Arya, D.R
Section 224Section 44ASection 56(2)(viib)

noticed that the assessee has claimed a sum of Rs.1,70,798/- as research & development expenditure. Since the assessee would be getting enduring benefit from the R&D activities, the A.O. took the view that the expenditure incurred by the assessee is capital in nature. Accordingly, he disallowed the above