TaxTMI 
TaxTMI 
2013 (2) TMI 629
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....rst appellate authority were dismissed holding that the amount spent by the assessee for acquisition of membership of the clubs should be treated as revenue expenditure. 2. I. T. A. No. 3011 of 2005 is filed by the Revenue being aggrieved by the common order dated March 31, 2005, passed by the Income-tax Appellate Tribunal in I. T. A. Nos. 733/Bang/1998 for the assessment year 1994-95, wherein the appeal filed by the Revenue challenging the order passed by the appellate authority, was dismissed confirming the order passed by the appellate authority wherein the appellate authority had set aside the order of the Assessing Officer holding that amount spent for acquisition of membership of the club and sum of Rs. 11,99,000 spent towards obtain....
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.... further submitted that the amount of Rs. 11,99,000 spent towards obtaining ISO-9001 certificate is not a revenue expenditure and is a capital expenditure as held by the Assessing Officer and the appellate authority and the Income-tax Appellate Tribunal were not justified in setting aside the said finding holding that the said expenditure is revenue in nature only on the ground that the certificate is only issued for a period of three years. He submitted that the substantial questions of law may he answered in favour of the Revenue. 7. The learned counsel appearing for the respondent-assessee submitted that the concurrent finding arrived at by the first appellate authority and the Income-tax Appellate Tribunal holding that the amount paid ....
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....o the contentions of learned counsel appearing for the parties and scrutinised the material on record. Re : Substantial question of law (1) in all the appeals 11. The only reason assigned by the Assessing Officer to hold that the expenditure incurred towards acquisition of membership of various clubs by the respondent-assessee is that the benefit conferred on the assessee is of enduring nature and, therefore, it is a capital expenditure. Further, the appellate authority on consideration of the contention of the learned counsel appearing for the parties, held that the expenditure incurred towards acquisition of membership of the club is revenue expenditure as the acquisition of membership of the club would only confer certain benefit....
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....ithin 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 disallowable on an application of this test. If the advantage consists merely in facilitating the assessee's trading operations or enabling the management and conduct of the assessee's business to be carried on more efficiently or more profitably while leaving the fixed capital untouched, the expenditure would be on revenue account, even though the advantage may endure for an indefinite future. The test of enduring benefit is, therefore, not a certain or conclusive test and it cannot be applied blindly and mechanically without re....
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....assessee had spent a sum of Rs. 11,99,000 towards the acquisition of ISO 9001 certificate and claimed that the said expenditure is revenue expenditure. Further, the Assessing Officer by order dated February 27, 1997, held that the certificate, which had been issued on February 15, 1993, was valid for a period of three years ; that the assessee had incurred an expendi-ture of Rs.11,99,000 towards acquisition of the said certificate and acquiring the certificate has certainly created the benefit of enduring nature to the assessee and, accordingly, held that the expenditure is capital in nature and disallowed the same and added Rs.11,99,000 to the total income. Further, the appellate authority, by its order dated July 13,1998, afte....