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2016 (1) TMI 784
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....al, Amritsar Bench, Amritsar (hereinafter referred to as "the Tribunal") in ITA No. 373(ASR)/2002 for the assessment year 1999- 2000, claiming the following substantial questions of law:- I. Whether on the facts and circumstances of the case, the ITAT was right in law in allowing the expenses for setting off new business and fee paid of Rs. 6,70,78,483/- treating it as revenue in nature? II. Whether on the facts and circumstances of the case the ITAT was right in law in directing that depreciation should be worked out with reference to the WDV computed as a result of order passed u/s 250(6) of the I.T. Act for the A.Y. 1998-99? 2. A few facts necessary for disposal of the present appeal as mentioned therein are that the....
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....uted one business or separate businesses? (ii) Whether the expenditure of Rs. 6,70,78,483/- was revenue or capital in nature? (iii) Whether the admissible depreciation had to be worked out with reference to the written down value computed as a result of order passed under Section 250(6) of the Act for the assessment year 1998-99? 5. Examining issue (i) above, it would be advantageous to notice the legal position first. The Apex Court in CIT v. Prithvi Insurance Co. Limited (1967) 63 ITR 632, considering whether the business of life insurance and the business of general insurance could be regarded as same business, had observed as under:- "A fairly adequate test for determining whether the two constitute the sam....
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..... The relevant observations read thus:- "I have considered the rival submissions in the matter. On merits, I find that the appellant has been able to ordain well that the various businesses carried on by it (including Healthcare) do constitute the same business of the appellant. I accordingly hold that the various businesses carried on by the appellant including Healthcare business, constitute one business only, and not separate businesses." 8. The Tribunal on appeal had affirmed the said findings. Learned counsel for the revenue was unable to demonstrate with reference to any material that the conclusion of the CIT(A) and the Tribunal was erroneous, perverse or based on misreading of evidence on record which may warrant interfe....
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....kinsey & Co. After appreciating the material, it was further recorded that this expenditure was revenue in nature. The Tribunal had affirmed the said findings with the following observations:- "12. Keeping in view the aforesaid discussion by the learned first appellate authority in the impugned order, we are of the considered opinion that the expenditure in dispute incurred by the assessee as revenue in nature and allowable as deduction because the assessee has incurred the aforesaid expenses on different businesses owned by the assessee including health care business which constituted one business only. As regards the payment made to McKinsey & Company the expenditure incurred was commensurate with the services rendered specially ....
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....2 also by the Bombay High Court may be examined. Suffice it to notice that on perusal of these judgments, we find that they were either based on finding of fact recorded therein that the business undertaken by the assessee was initiation of a new business and not expansion of business which was already carried on by the assessee or were based on individual fact situation involved therein. Thus, no benefit can be derived by the revenue from the aforesaid enunciations. 13. Looking from another perspective, we find that the present case relates to the assessment year 1999-2000 where the allowability of the expenditure is not in dispute but the issue is whether it has to be allowed in one year as revenue expenditure or by spreading over by w....