TaxTMI 
TaxTMI 
2019 (4) TMI 774
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....avit, Revenue has put forth the following reasons for the delay in filing the appeal:- "3. I pray for condonation of delay in filing of appeal to the Hon'ble Income Tax Appellate Tribunal. The delay is due to the fact that the time barring date for completion of assessments during the last financial year was 31st December 2016 and also since there were continuous holidays during the months of October and November 2016 due to festivals, the available staff were on long leave. Since there is sufficient cause for delay in filing the appeal, it is requested that the delay in filing the appeal may be condoned." 2.2 We have considered the rival submissions in the matter of condonation of the delay of 51 days on the part of Revenue in filing the instant appeal for Assessment Year 2008-09 before the Tribunal. Taking into account the facts and circumstances involved, the reasons/explanations put forth by Revenue and the principles laid down by the Hon'ble Apex Court in the case of MST Katiji and Others (167 ITR 471) (SC) for dealing with matters relating to condonation of delay, we are of the view that Revenue had reasonable and sufficient cause for filing the appeal for Assessment Ye....
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....diture of Rs. 98,88,226/- claimed by the assessee in respect of salaries and training cost of employees. While doing so, the CIT(A) rendered the following observations / findings:- (i) An examination of the said expenditure shows that it pertains to IRSE assessment cost and salaries / training cost of employees and that such expenses are in line with the normal business activity of the assessee. (ii) Merely because these expenses inculcate better skills to employees and long term indirect benefit to the assessee; that in itself does not render the expenses to be disallowable as capital investment. (iii) The trained manpower is not a capital asset of the assessee and the assessee does not get to own any exclusive or absolute rights on the trained staff. (iv) The expenditure has to be tested by the yardstick of commercial expediency and business purpose, as was held by the Hon'ble Apex Court in the case of Travancore Titanium Products Ltd., Vs. CIT (60 ITR 277) (SC). (v) In the background of the facts and circumstances of the case, the expenditure made towards salary, training and skill enhancement of employees is revenue in nature. 3.2.2 The CIT(A) also observed th....
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....ing the expenses amounting to Rs. 74,16,169/- as revenue without appreciating the fact that any expenditure incurred in brining into existence any asset of enduring value is capital expenditure. In ground No.3 (supra), it is contended that the assessee itself has capitalized the said expenditure and therefore it was wrong on the part of the CIT(A) to treat such capitalized the said expenditure and therefore it was wrong on the part of the CIT(A) to treat such capitalized expenditure as Revenue in nature. Before us, the learned DR for Revenue supported the order of the AO and reiterated the contentions raised in the grounds on this issue. 6.2.1 Per contra, the learned AR for the assessee supported the orders of the CIT(A) on this issue and submitted that the CIT(A) has examined the facts of the matter as well as the legal principles and held the said expenditure to be Revenue in nature. In this regard, the learned AR placed reliance on and filed copies of the following judicial pronouncements:- (i) Kedarnath Jute Manufacturing Co. Ltd., Vs. CIT (1971 AIR 2145) and (ii) DCIT Vs. Sapient Corporation Pvt. Ltd., (ITA No.1856/Del/2010 dated 08.11.2011; which the learned AR submi....
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....upon the provisions of the Income Tax Act, 1961 and not on the entries in the Books of Account. The relevant portion of the decision of the Hon'ble Apex Court is extracted hereunder: "The main contention of the learned Solicitor General is that the assessee failed to debit the liability in its books of accounts and, therefore, it was debarred from claiming the same as deduction either under section 10 (1) or under s. 10 (2) (xv) of the Act. We are wholly unable to appreciate the suggestion that if an assessee under some misapprehension or mistake fails to make an entry in the-books of account and although under the law, a deduction must be allowed by the Income Tax Officer, the assesses will lose the right of claiming or will be debarred from being allowed that deduction. Whether the assessee is entitled to a particular deduction or not will depend on the provision of law relating thereto and not on the view which the assessee might take of his rights nor can the existence or absence of entries in the books of account be decisive or conclusive in the matter." 6.3.3 It is settled principle, upheld in several judicial pronouncements that; merely because the expenditure gives en....
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.... Bench of ITAT has held after taking into consideration the decision of Hon'ble Supreme Court in the case of Madras Industrial Investment Corpn. Ltd. (supra) that even though the taxpayer had written off the expenditure in its hooks of account over a period of five years, it must be allowed in its entirety in the year in which it was incurred if it was the revenue expenditure and if it was wholly and exclusively incurred for the purposes of its business. In the present case. there is no dispute that the expenditure in question incurred by the taxpayer company on training of its employees was wholly and exclusively incurred for the purpose of its business. As regards the nature of the said expenditure, the submission of the taxpayer company before the authorities below as well as before us has been that the said expenditure was incurred for the purpose of imparting training to its employees in order to increase their efficiency in day-to-day working and there is nothing brought on record on behalf of the revenue to controvert/rebut this position. In the case of Hindustan Aluminium Corpn. Ltd. (supra) cited by the learned counsel for the taxpayer, the expenditure incurred on practica....