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TMI Blog1985 (4) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... payment to the lawyers. The assessee at the time of assessment asserted that this expenditure was revenue in nature and, therefore, he was entitled to deduction of this amount. The Income-tax Officer rejected the claim of the assessee, holding that the expenditure incurred on account of the shifting of the head office from Jamshedpur to Calcutta was expenditure of capital nature. The assessee-opposite party filed appeal to the Appellate Assistant Commissioner. The contention of the assessee found favour with the Appellate Assistant Commissioner. According to him, the expenditure was revenue in nature and not capital in nature. He, therefore, allowed the appeal holding that the assessee was entitled to deduction of that amount. Being agg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shape of transfer to a better factory site, an advantage which enabled the trade to prosper and an advantage that could be expected to last for ever. This verdict was given by the Supreme Court following the decisions in Atherton v. British Insulated and Helsby Cables Ltd. [1925] 10 TC 155 (HL) and Assam Bengal Cement Co. Ltd. v. CIT [1955] 27 ITR 34 (SC). Let us see how the facts stand in the instant case. The reasons for shifting the registered office of the company are to be found in the order of the Appellate Assistant Commissioner. The reasons were that the petitioner was a subsidiary company to the holding company, M/s. Indian Steel and Wire Products. The registered office of the holding company was at Calcutta. The bulk of the par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Whether there was shifting of the factory or shifting of the head office was inconsequential. The distinction attempted to be made is more ethereal than real. Learned counsel for the assessee also submitted that shifting of the head office was incidental to the business of the factory and, therefore, the expenditure incurred on account of shifting must be treated to be of revenue nature. It is true that it is connected with the business of the factory but a distinction has been made in regard to the expenses which are of enduring nature and the activities which are of recurring nature. In the instant case, we have no doubt that the advantages from the shifting of the head office, for the reasons indicated in the order of the Appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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