2002 (8) TMI 7 - HC - Income Tax

Payment of the development charges - assessee paid a sum of ₹ 25 lakhs for development purposes for the purpose of becoming a member of Stock Exchange - assessee s contention was that the amount is by way of revenue expenditure - Secondly, the assessee submitted that it was entitled to dissect the revenue expenditure of ₹ 25 lakhs, into 10 equal parts of ₹ 2,50,000 each, and claim deduction thereof in 10 successive assessment years - No doubt a very enduring benefit was accruing to the assessee on payment of the development charges. That would render the expenditure as a capital one. Moreover, we are quite unaware of any authority given in the Income-tax Act, for carrying forward revenue expenditure, after dividing it, as per the assessee s own wish, into subsequent assessment years. Thus petition is dismissed

Summary

The High Court of Calcutta dismissed the assessee's appeal regarding the payment of Rs. 25 lakhs for development purposes to become a member of the Calcutta Stock Exchange. The court held that the expenditure was capital in nature, not revenue, and rejected the claim to divide it into parts for deduction over multiple assessment years. The appeal was deemed hopeless, and no legal issue was found in the Tribunal's order.