“Section 32(1)(iv)”
The decision most relied on for Section 32(1)(iv) is Alembic Chemical Works Co. Ltd. v. CIT (177 ITR 377), cited in 275 judgments on BharatTax.
Leading authorities on Section 32(1)(iv)
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.
The Supreme Court in Techno Shares & Stocks Ltd. v. CIT-IV held that depreciation is not available on a BSE membership card under section 32(1)(ii) of the Income Tax Act as it is not a depreciable asset for the purpose of business or commercial rights of a similar nature.
Disallowance under Section 14A cannot be added back when computing book profit under Section 115JB, as Section 115JB is a complete code in itself.
Exemptions under Section 10 of the Income Tax Act are available to general insurance companies.
Depreciation is allowable on capital assets for charitable trusts even if expenditure was allowed as deduction, as long as it doesn't amount to double deduction. The principles of commercial accountancy apply when computing business income.
Expenditure on product development may be treated as capital expenditure, leading to disallowance of weighted deduction claimed under Section 35(2AB) for in-house scientific research.
An assessment order passed under Section 143(3) of the Income Tax Act, 1961, prevents the initiation of fresh proceedings under Section 147 based solely on a change of opinion.
Expenditure incurred for upgrading an existing product is revenue expenditure, not capital expenditure, as it keeps the product competitive and responsive to market changes. Such expenditures do not create an enduring benefit.
