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TMI Blog2023 (10) TMI 1444X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure was incurred, no capital asset or advantage of enduring benefit was brought in by the assessee after the termination of the agreement. In Assam Bengal Cement [ 1954 (11) TMI 2 - SUPREME COURT] , it is held that if the expenses are incurred not for the purpose of bringing in the asset or advantage for the enduring benefit but for running the business, such expenses are treated as revenue expenditures. Therefore, the expenses incurred in entering into an agreement merely for expansion of existing business and not for setting up of a new business, are to be treated as revenue expenditures . Decided in favour of assessee. - The Hon ble Mr. Justice P.S. Dinesh Kumar And The Hon ble Mr. Justice C.M. Poonacha For the Appellants : Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owards non-recoverable projects cost holding it as capital expenditure. On appeal, the CIT (A) [Commissioner of Income Tax (Appeals)] partly allowed assessee s appeal. On further appeal by both assessee and Revenue, ITAT [Income Tax Appellate Tribunal] allowed assessee's appeal treating the expenditure as revenue in nature. Hence, this appeal by the Revenue. 4. Shri. Sanmathi, for the Revenue, praying to allow the appeal, submitted that the ITAT has erred in setting aside the disallowance towards non-recoverable project cost holding that the expenditure is in the nature of revenue expenditure, though the expenditure on the construction/expansion of the hospital gave rise to enduring benefit to assessee in generating income. Hence, the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SGMC. The investment made was towards building and equipments. Therefore, the AO had rightly held the expenditure as capital in nature. 9. Shri. Easwar s reply is that the agreements were entered in the course of assessee s business for the purpose of managing the hospitals and not for new or separate business. The expenditures were incurred to meet the continuing operational costs for running the business activities. 10. In Assam Bengal Cement Co. Ltd. Vs. CIT [(1995) 27 ITR 34 (SC)], while considering the question as to the line of demarcation between capital expenditure and revenue expenditure, the Apex Court has held thus: If the expenditure is made for acquiring or bringing into existence an asset or advantage for the enduring benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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