2011 (1) TMI 918

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..... harges for restructuring of the company is for earning income and is in conformity with the provisions of section 37 of the Act. - Company had incurred expenditure on legal, financial and industrial consultation then it could not be said to be outside the purview of business of the company. - See CIT v. South India Sugars Ltd.(2004 -TMI -10417- Madras High Court). - Decided in favor of the assesse .....

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..... is not for enhancing the sales or earning any other income." 2. In order to appreciate the controversy few facts may be noticed. The assessee-company is manufacturing colour picture tubes. In respect of the assessment year 2004-05 the assessee-company incurred expenditure for the purpose of restructuring. The assessee-company had become a sick unit and that regard a reference was made to BIFER f .....

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..... diture has not been incurred for enhancing sale nor for earning of any income. The Commissioner of Income-tax (Appeals) also accepted the opinion expressed by the Assessing Officer. However, the Tribunal on the aforesaid issue held otherwise by observing as under:- "... We are of view that the impugned expenditure was incurred for enhancing the sales or for earning the income. We have found that .....

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..... ng more elastic in its application to the facts of each case. This is consistent view of the Courts. The word 'capital' connotes permanency and capital expenditure is therefore, closely akin to the concept of securing something, tangible or intangible property, corporeal or incorporeal right so that they could be of a lasting or enduring benefit to the enterprise in issue. Revenue nature expenditu .....

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..... bunal is that the expenditure towards consultation charges for restructuring of the company, the amount paid to the Chartered Accountants and Asset Care Enterprise Ltd., was incurred or for earning income. Further finding of the Tribunal is that expenses were also incurred in conformity with the provisions of section 37 of the Act which was meant for the purposes of business. Therefore, we find th .....

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