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TMI Blog2018 (5) TMI 1700X X X X Extracts X X X X X X X X Extracts X X X X ..... g technology, software has to be regularly updated so as to keep pace with the changing technology - view taken by the Tribunal that the expenditure is on Revenue account is an entirely possible view - Decided in favor of assessee. Whether the expenses towards consultancy fees, video shooting for training etc in respect of occupation, health and safety measure for the benefit of its employees are revenue in nature - Held that:- The test of one time payment of payment or not is not the sole test to determine the nature of expenditure - the expense does not add to or expands the profit making apparatus of the assessee - thus revenue in nature - Decided in favor of assessee. Appeal admitted on the substantial question of law at No. (3) - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asures and thereby resulting in enduring benefit to the assessee ? ( 3) Whether on the facts and circumstances of the case and in law the Tribunal is justified in upholding the decision of CIT (A) in deleting the disallowance of ₹ 72,14,652/u/ s 40a(ia) of the Act ? 3 Regarding Question (1): (a) The impugned order of the Tribunal dismissed the Revenue's Appeal before it by holding that the amount of ₹ 38.90 Lakhs paid by it to CA (India) Technologies Private Limited for purchase of computer software was revenue in nature. This by upholding the finding of the Commissioner of Income Tax (Appeals) [CIT(A)] that the software purchased was to upgrade the software to solve the specific problems of user faced b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enduring nature ipso facto it must be held to be capital and not revenue in nature is contrary to the decision of the Supreme Court in Empire Jute Co. Ltd. v. Commissioner of Income Tax reported in 124 ITR Page 1. In the above case, while dealing with a similar submission, the Court has observed as under: ........ There may be cases where expenditure, even if incurred for obtaining advantage of enduring benefit, may, none the less be on revenue account and the test of enduring benefit may break down. It is not every advantage of enduring nature acquired by an assessee that brings the case within the principle laid down in this test. What is material to consider is the nature of the advantage in a commercial sense and it is only wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incurred on occupational, health and safety measures was onetime expenditure and gave enduring benefit to the assessee. Thus, capital in nature. We find that both the CIT (Appeals) and the Tribunal have rendered a finding of fact that the expense of ₹ 7.82 Lakhs incurred to ensure good health and safety of its employees and to provide accident free environment. The test of one time payment of payment or not is not the sole test to determine the nature of expenditure. So also the test of enduring benefit in this case would not apply for the reason that the expenses assist in providing an hassle free environment for smooth running of business. The expense does not add to or expands the profit making apparatus of the Respondent as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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