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TMI Blog2014 (3) TMI 470X X X X Extracts X X X X X X X X Extracts X X X X ..... rein. The appeal before the Tribunal was directed against the order dated 10.12.2004 passed by the CIT(A)-I, (for short 'First Appellate Authority or FAA). The Tribunal by its order dated 12.2.2007 disposed of two income tax appeals bearing Nos.ITA 364 & 365/2005 pertaining to the assessment years 1995-96 and 1998- 99. In the present appeal, we are concerned only with the order of the Tribunal in ITA No.365/2005. 2. The FAA vide its order dated 10.12.2004 dismissed the appeal filed by the respondent/assessee bearing ITA No.481/AC-11(2)/CIT(A)I/01-02. The appeal before the FAA was directed against the order dated 20.4.2001 passed by the Joint Commissioner of Income-tax, Special Range-5, Bangalore (for short 'Assessing Officer' or &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing officer but in respect of each eligible unit." 5. By consent and with the assistance of learned counsel for the parties, we have re-formulated the substantial question of law No.2 as follows: "2. Whether the Tribunal was correct in holding that for the purpose of computation of deduction under Section 80IA of the Act income from interest on KEB & NSC deposits should be treated as profits and gains of an industrial undertaking." 6. The first substantial question of law relates to a sum of Rs.10 lakhs, which were paid by the assessee as a license fee for the use of central court yard, having marble, (for short "Court Yard") in Lallgarh Palace (for short 'Palace'). It appears that there was a Memorandum of Un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t observation made by the Supreme Court, in the said judgment, which, in our opinion, support the case of the respondent/assessee to contend that the expenditure of Rs.10 lakhs would be on revenue account. The relevant observation in the case of Empire Jute Co. Ltd. reads thus: "The decided cases have, from time to time, evolved various tests for distinguishing between capital and revenue expenditure but no test is paramount or conclusive. There is no all-embracing formula which can provide a ready solution to the problem; no touchstone has been devised. Every case has to be decided on its own facts, keeping in mind the broad picture of the whole operation in respect of which the expenditure has been incurred. But a few ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le laid down in this test. What is material to consider is the nature of the advantage in a commercial sense and it is only where the advantage is in the capital field that the expenditure would be disallowable on an application of this test. If the advantage consists merely in facilitating the assessee's trading operations or enabling the management and conduct of the assessee's business to be carried on more efficiently or more profitably while leaving the fixed capital untouched, the expenditure would be on revenue account, even though the advantage may endure for an indefinite future. The test of enduring benefit is, therefore, not a certain or conclusive test and it cannot be applied blindly and mechanically without regard to the parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eported in [2009] 317 ITR 218 (SC) and in PANDIAN CHEMICALS LTD. -vs- CIT reported in [2003] 262 ITR 278 (SC) and submitted that the question is squarely covered by these judgments. Learned counsel appearing for the respondent/assessee also fairly submitted that this question is covered by these judgments. Hence, we answer the second question in favour of the Revenue and against the Assessee. 11. Mr. Roopesh Jain, learned counsel appearing for the respondent/assessee, insofar as the third question is concerned, submitted that an identical question was raised in ITA No.144/2002, Commissioner of Income Tax & anr. Vs M/s.ITC Hotels Ltd. decided on 7th September, 2009 and it was answered by this Court in favour of the Revenue and against the A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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