9911796707
TMI Blog2013 (2) TMI 629X X X X Extracts X X X X X X X X Extracts X X X X ..... TMI 1 - SUPREME COURT] and decision of HC in CIT v. Wipro Systems [2009 (11) TMI 402 - KARNATAKA HIGH COURT] followed. - Decided in favor of assessee. Expenditure on ISO-9001 certificate - held that:- the certificate would only certify that the procedure followed by the assessee in the manufacture and the quality maintained during manufacture is in accordance with the standard prescribed. - held as revenue in nature - Decision in CIT v. Perot Systems TSI (India) Ltd. [2010 (9) TMI 108 - DELHI HIGH COURT] followed - Decided in favor of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... ere correct in holding Rs.11,99,000 sum paid by the assessee for obtaining ISO-9001 certificate was a revenue expenditure and not a capital expenditure as held by the Assessing Officer ?" 4. I. T. A. Nos. 2975 of 2005 and 2976 of 2005 have been admitted for consideration of the substantial question of law No. (1) stated above which is common to all the three appeals. 5. We have heard the learned counsel appearing for the appellants and learned counsel appearing for the respondent on the abovesaid substantial questions of law. 6. The learned counsel appearing for the appellant-Revenue submitted that acquisition of membership would confer enduring benefit as the amount is to be paid only once and no amount is payable further and, therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, science and various methods of transactions involved, the concurrent finding arrived at by the appellate authorities is justified. 8. In support of his contention that the amount paid towards acquisition of membership is a revenue expenditure, he has relied upon the following decisions. (1) CIT v. Blow Plast Ltd. [2010] 322 ITR (St.) 6 ; (2) CIT v. Samtel Color Ltd. [2010] 326 ITR 425 (Delhi) ; (3) CIT v. Wipro Systems [2010] 325 ITR 234 (Karn) ; (4) CIT v. Sundaram Industries Ltd. [1999] 240 ITR 335 (Mad) ; (5) Gujarat State Export Corporation Ltd. v. CIT [1994] 209 ITR 649 (Guj) ; and (6) Otis Elevator Co. (India) Ltd. v. CIT [1992] 195 ITR 682 (Bom). 9. He has also relied upon the decision in CIT v. Perot Systems TSI (In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by the appellate authority. It is well settled that factors to be borne in mind while considering the question as to whether the expenditure is revenue or capital in nature has been laid down by the hon'ble Supreme Court in Empire Jute Co. Ltd.'s case [1980] 124 ITR 1 (SC), which read as under : "(i) It is not a universally true proposition that what may be a capital receipt in the hands of the payee must necessarily be capital expenditure in relation to the payer. The fact that a certain payment constitutes income or capital receipt in the hands of the recipient is not material in determining whether the payment is revenue or capital disbursement qua the payer. (ii) There may be cases where expenditure, even if incurred for obtaini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee, as referred to above, it has been specifically held that acquisition of membership of the club would be revenue expenditure and not capital expenditure and the decision of this court relied upon by the learned counsel appearing for the assessee in CIT v. Wipro Systems [2010] 325 ITR 234 (Karn) would also show that the amount spent towards the membership acquired by the assessee should be treated as revenue expenditure. Therefore, the concurrent finding arrived at by the appellate authority and the Income-tax Appellate Tribunal that the expenditure incurred for acquisition of membership of the club is revenue expenditure, is justified and cannot at all said to be perverse or arbitrary so as to call for interference in this appeal. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority has also held that the said certificate issued was valid for a period of three years and advantage of the certificate would not persist beyond the period for which the certificate is given. The Income-tax Appellate Tribunal has con- firmed the said order passed by the appellate authority by holding that the expenditure incurred towards acquisition of ISO-9001 certificate is revenue in nature. 14. In the light of the principles laid down by the hon'ble Supreme Court in Empire Jute Co. Ltd.'s case [1980] 124 ITR 1 (SC) and also the decision relied on by the learned counsel appearing for the assessee in CIT v. Perot Systems TSI (India) Ltd. [2012] 349 ITR 563 (Delhi) it is clear that the ISO certificate, would be granted after inspe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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