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TMI Blog2009 (7) TMI 144X X X X Extracts X X X X X X X X Extracts X X X X ..... ure, as a capital expenditure - 1360 of 2006 - - - Dated:- 6-7-2009 - A. K. SI KRI and VALM IKI J. MEHTA JJ. Ms. Preni Lata Bansal and Paras Choudhary for the appellant. M. S. Syali and Ms. Mahua Kalra for the respondent. JUDGMENT The judgment of the court was delivered by 1. A . K. SI KRI J. —This appeal under section 260A of the Income-tax Act, 1961, has been filed by the Revenue challenging the order dated March 24, 2006, passed by the Income-tax Appellate Tribunal (ITAT) whereby the Income-tax Appellate Tribunal has dismissed the appeal of the Revenue and confirmed the order of the Commissioner of Income-tax (Appeals) and held that the Assessing Officer was not justified in disallowing the deduction on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the books of account, the burden lies on the assessee to prove that the expenditure was of revenue nature". 3. Before the Commissioner of Income-tax (Appeals) (CIT(A)), the assessee-company contended that despite the treatment given in the books of account by the assessee-company as deferred revenue expenditure, the fact remains that the said expenditure was of revenue nature. The Commissioner of Income-tax (Appeals) accepted the stand of the assessee-company, inter alia, for the following reasons : "(i) Prima facie, the expenditure was of revenue nature. (ii) No capital asset was acquired or brought into existence by incurring the expenditure. (iii) Expenditure incurred for the purpose of running a business efficiently cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me was being incurred, viz., being to substitute the components of raw material and as such, the advantage accrued to the assessee is only in the revenue held and not in the capital field. 5. Before us it is not disputed by the appellant that the expenditure incurred towards salaries, wages, traveling expenses, etc., are revenue in nature, however, the counsel for the appellant has contended that since there was enduring benefit from the expenditure, the said expenditure is capital in nature. Reliance was placed upon Assam Bengal Cement v. CIT [1955] 27 ITR 34 (SC) on the meaning of capital expenditure and on Taparia Tools Ltd. v. Joint CIT [2003] 260 ITR 102 (Bom) and CIT v. Kanyakumari Dist. Co-op. Spg. Mills Ltd. [2003] 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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