Business expenditure

Capital or revenue expenditure — Expenditure incurred by assessee for obtaining CNG connection to facilitate process of manufacturing is revenue in nature even when payment was made as capital contribution — as held by MumHC in CIT v Tata SSL Ltd. — In favour of: The Assessee ; ITA No. 1321 of 2010

Expenditure, even if incurred for obtaining an advantage of enduring benefit, may be on the revenue account. In the present case, the assets remained the property of Mahanagar Gas Ltd. and that the sole object of the payment was to get gas to facilitate the manufacturing activity carried on by the assessee. Thus, the expenditure incurred by the assessee is assessable as revenue expenditure.

Decided on: 8 June 2011