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TMI Blog2010 (9) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of business of eligible industrial undertaking. The AO is, therefore, directed not to reduce the profits of business by the amount of Rs. 20 lacs received by way of corporate charges and Rs. 9,00,250/- received by way of reimbursement recovered for use of work stations - assessee do not acquire any new capital asset but merely maintains capital asset already acquired - expenditure assumes the character of revenue - allowable - no substantial question of law arises. Dismissed. - 402/2008 - - - Dated:- 23-9-2010 - CORAM: HON'BLE MR. JUSTICE A.K. SIKRI HON'BLE MS. JUSTICE REVA KHETRAPAL Ms. Suruchi Aggarwal and Mr. Chandramani Bharadwaj, Advocates Mr. Ajay Vohra and Ms. Kavita Jha, Advocates A.K. SIKRI, J. (ORAL) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... khs earned from the sister concern, i.e., HCL Technologies Ltd. 3. Insofar as first item is concerned, the admitted facts are that the assessee had spent a sum of Rs. 23,52,000/- in obtaining ISO quality certification. It was the case of the assessee that ISO certification was a critical factor for export activities. 50% of this amount was reimbursed by the EXIM Bank, which amounted to Rs. 11,76,000/-. It was in this backdrop that the assessee had claimed exemption of the receipt of the aforesaid amount under Section 10A of the Act. The Tribunal found, on the basis of aforesaid facts, and rightly so, that the total expenses incurred by the assessee were much higher, namely, Rs. 23,52,000/-, which was allowable as expenditure and, therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e treated as revenue expenditure or capital expenditure. The assessing officer had disallowed the same treating it as capital expenditure. Reversing this decision, ITAT has allowed it as revenue expenditure in the following manner:- "11. We have considered rival submissions. As rightly contended by counsel for the appellant, the amount paid is not for acquiring any leasehold right by way of annual lease rent. Thus, the amount is regarding payment for continuing to enjoy leasehold rights. In such situation, the assessee do not acquire any new capital asset but merely maintains capital asset already acquired. Thus, the expenditure assumes the character of revenue in nature and not capital expenditure. We accordingly hold that the expenditur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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