Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (5) TMI 144 - ITAT DELHINature of expenditure - expenditure on design charges for T3 Airport construction - revenue or capital expenditure - HELD THAT:- From the records, we find that the amount has been paid by the assessee to M/ s Corus to prepare a detail lay out, drawing of the ceiling for which the assessee was the executor. The payment was made for designing and detailing services for roofing system in respect of T3 terminal at IGAI, Delhi for which DIAL is the concessionaire. The amount has been paid for obtaining technical support, drawings & designs. The designs are specific to the Airport and cannot be replicated for any other structure or industrial establishment other than the RGAI.The assessee has not obtained any capital asset by the way of payment made to M/s Corus for designs. There may be cases where expenditure though referable to or in connection with fixed capital is nevertheless allowable as revenue expenditure e.g. expenditure incurred in preserving or maintaining capital assets. This test is therefore clearly not one of universal application. It is true that if disbursement is made for acquisition of a source of profit or income, it would ordinarily be in the nature of capital expenditure. The source of profit or income was the profit making apparatus and this remained untouched and unaltered. There was no enlargement of the permanent structure of which the income would be the produce or fruit. When dealing with cases where the question is whether expenditure incurred by an assesses is capital or revenue expenditure, the question must be viewed in the larger context of business necessity or expediency. If the outgoing expenditure is so related to the carrying on or the conduct of the business that it may be regarded as an internal part of the profit- earning process and not for acquisition of an asset or a right of a permanent character. The possession of which is a condition of the carrying on of the business, the expenditure may be regarded as revenue expenditure. Relying on the above propositions considered by the Hon’ ble Supreme Court in the case of M/ s Empire Jute Company Ltd. [1980 (5) TMI 1 - SUPREME COURT] we hold that the ld. CIT (A) has rightly allowed the deduction. Long Term Capital Gains - AO doubted the sale value of the flat sold by the assessee and referred the matter to the DVO to determine the share market value - difference in value determined by DVO as against the sale value shown by the assessee - HELD THAT:- On going through the provision of Section 50C , we hereby hold that the value determined by the stamp duty authorities or consideration so received or accruing as a result of the transfer to the assessee whichever is more, shall be the value of the property. Hence, the authorities are hereby directed to compute the capital gains taken into consideration, the sale value of ₹ 1,05,00,000/-. The AO may re- verify the value of the property from the registration authorities to confirm the value as submitted by the assessee of ₹ 73,00,000 /- and take action only if found contra. Deduction u/s 40A(2)(b) - payments made to Mr. Arvind Nanda, with regard to the vehicle purchase, payment made to M/ s Intertec on account of job work and the rental payments has been examined - CIT-A deleted the addition - HELD THAT:- On going through the entire factum of the case, we find that the disallowances are purely hypothetical without bringing any tangible material to prove that the payments are over and above the market rates. Hence, we hereby decline to interfere with the order of the ld. CIT (A). Revenue appeal dismissed.
|