2012 (2) TMI 15

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....ng of the appeal is condoned. Applications are disposed of. ITA 22/2012 ITA 24/2012 1. These appeals by the Revenue under Section 260A of the Income Tax Act, 1961 (Act, for short) relate to assessment years 2006-07 and 2007-08 and are directed against the orders of the Income Tax Appellate Tribunal dated 30.8.2010 and 17.6.2011. As the issue involved in the two appeals is similar, we are disposing of these two appeals by this common order.   2. The assessee is engaged in the business of manufacturing and trading in pharmaceuticals products. For the purpose of sale of the pharmaceuticals products, the assessee has to get the pharmaceuticals products registered in foreign countries. The registration is normally for a period of 5 years....

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....Corporation (supra), on which the reliance was placed by Ms. Bansal, the general principle stated was that ordinarily revenue expenditure incurred wholly and exclusively for the purpose of business can be allowed in the year in which it is incurred. Some exceptional cases can justify spreading the expenditure and claiming it over a period of ensuing years. It is important to note that in that judgment, it was the assessee who wanted spreading the expenditure over a period of time as was justifying such spread. It was a case of issuing debentures at discount; whereas the assessee had actually incurred the liability to pay the discount in the year of issue of debentures itself. The Court found that the assessee could still be allowed to sprea....

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....revenue". However, cautioned the court, it would be misleading to suppose that in all cases securing a benefit for business expenditure would be capital expenditure. The court added the caution in the following words (page 10) :   ". . . There may be cases where expenditure, even if incurred for obtaining advantage of enduring benefit, may, none the less, be on revenue account and the test of enduring benefit may break down. It is not every advantage of enduring nature acquired by an assessee that brings the case within the principle laid down in this test. What is material to consider is the nature of the advantage in a commercial sense and it is only where the advantage is in the capital field that the expenditure would be disallo....