2010 (8) TMI 19

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....l has been filed under Section 260A of Income Tax Act, 1961 (for brevity "Act, 1961") challenging the order dated 10th September, 2009 passed by the Income Tax Appellate Tribunal (in short "ITAT") in ITA No. 3186/Del/2009 relating to the Assessment Year 2005-2006. 2. Ms. Suruchii Aggarwal, learned counsel for Revenue submitted that ITAT had failed to appreciate that the consultancy charges paid ....

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....ance upon a judgment of this Court in Commissioner of Income Tax Vs. Gujarat Guardian Ltd., (2008) 306 ITR 320 (Delhi). 4. Having perused the paper book and having heard Ms. Aggarwal, we are in agreement with the conclusion arrived at by the Commissioner of Income Tax (Appeals) and the ITAT that the consultancy expenditure in the present case amounted to revenue expenditure, as by virtue of the ....

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....1) Outlay is deemed to be capital when it is made for the initiation of a business, for extension of a business or for a substantial replacement of equipment; (2) Expenditure may be treated as properly attributable to capital when it is made not only once and for all, but with a view to bringing into existence an asset or an advantage for the enduring benefit of a trade. If what is got rid of by....

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....hat matters is the nature of advantage in a commercial sense. The Court clarified that it is only where the advantage is in the capital field that the expenditure would be capital in nature. 8. We are afraid that the judgment referred to by the learned counsel for the Revenue has no application to the facts of the present case as in the case cited by her, the issue whether consultancy charges amo....