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TMI Blog2016 (1) TMI 784X X X X Extracts X X X X X X X X Extracts X X X X ..... to Mckinsey & Co. After appreciating the material, it was further recorded that this expenditure was revenue in nature. - Decided against revenue Depreciation worked out with reference to the written down value computed as a result of order passed under Section 250(6) of the Act for the assessment year 1998-99 - Held that:- Since the order of CIT(A) in the case of the assessee for the assessment year 1998-99 had resulted in higher WDV of the asset, and the said order was affirmed by the tribunal in appeal, the depreciation for the assessment year 1999- 2000 had thus been rightly directed to be worked out with reference to the WDV computed as a result of order passed under Section 250(6) of the Act for the assessment year 1998-99. No error could be pointed out in the approach adopted by the CIT(A) as well as the Tribunal for taking the higher WDV of the asset of the assessee for the assessment year 1999-2000 - Decided against revenue - ITA No. 426 of 2010 (O&M) - - - Dated:- 8-9-2015 - MR. AJAY KUMAR MITTAL AND MR. RAMENDRA JAIN., JJ. For The Appellant : Mr. Vivek Sethi, Advocate For The Respondent : Mr. Ajay Vohra, Senior Advocate with Mr. Gaurav Jain, Advocate and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal:- (i) Whether the different business/ventures carried on by the assessee including healthcare business constituted one business or separate businesses? (ii) Whether the expenditure of ₹ 6,70,78,483/- was revenue or capital in nature? (iii) Whether the admissible depreciation had to be worked out with reference to the written down value computed as a result of order passed under Section 250(6) of the Act for the assessment year 1998-99? 5. Examining issue (i) above, it would be advantageous to notice the legal position first. The Apex Court in CIT v. Prithvi Insurance Co. Limited (1967) 63 ITR 632, considering whether the business of life insurance and the business of general insurance could be regarded as same business, had observed as under:- A fairly adequate test for determining whether the two constitute the same business is furnished by What Rowlatt, J. said in Scales v. George Thompson Co. Ltd: Was there any inter-connection, any interlacing, any inter-dependency, any unity at all embracing those two business? That inter-connection, interlacing, inter-dependence and unity are furnished in this case by the existence of common management, c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,075.00 Rent 1,21,182.00 Travelling and Conveyance 65,18,063.02 Communication 9,81,000.00 Business Promotion 9,68,569.11 Legal Professional (including fee paid to Mckinsey Co.) 5,15,24,383.00 Advertisement 60,602.00 Miscellaneous/other expenses 16,44,609.39 6,70,78,483/- 10. There was no serious dispute with regard to expenses incurred by the assessee like salaries and wages, rent, travelling and conveyance, communication, business promotion advertisement and miscellaneous/other expenses, that these were revenue in nature. However, the amount of ₹ 6,70,78,483/- claimed as business expenditure by the assessee included professional fees of ₹ 4,46,,44,800/- paid to Mckinsey Co. Learned counsel for the revenue urged that this payment was capital in nature and was not admissible as revenue expenditure. The CIT(A) had held that in so far as genuine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice that on perusal of these judgments, we find that they were either based on finding of fact recorded therein that the business undertaken by the assessee was initiation of a new business and not expansion of business which was already carried on by the assessee or were based on individual fact situation involved therein. Thus, no benefit can be derived by the revenue from the aforesaid enunciations. 13. Looking from another perspective, we find that the present case relates to the assessment year 1999-2000 where the allowability of the expenditure is not in dispute but the issue is whether it has to be allowed in one year as revenue expenditure or by spreading over by way of depreciation or amortisation over the years after capitalising it. At present, the number of years that have gone by from the initial year has been more than about fifteen years. Learned counsel for the revenue has not been able to demonstrate that there had been any change in the rate of taxation during these years. Thus, even if the substantial portion of the expenditure had been capitalised and depreciation or amortisation allowed under the Act, at the prevalent rate admissible under the Act and the I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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