2020 (11) TMI 144

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.... Appellate Tribunal, Chennai, 'C' Bench ('the Tribunal' for brevity) in I.T.A.No.2239/MDS/2015 and CO.No.15/Mds/2016 in I.T.A.No.2239/MDS/2016 for the Assessment Year 2010-11. The Revenue has raised the following Substantial Questions of Law for consideration: "1. Whether the Tribunal was right in allowing lump sum payment for development of infrastructure for uninterrupted power supply is revenue expenditure u/s 37(1) 2. Whether the Tribunal was right in holding that the lump sum expenditure incurred for obtaining uninterrupted power supply for 14 years is allowable in one year though the same will result in distorted profit of the assessee." 2. We have heard Mr.S.Rajesh, learned Standing counsel for th....

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....the expenditure is a capital expenditure, but however allowed the alternate plea of depreciation. The Revenue filed appeal before the Tribunal as against the order of the CIT(A), allowing the claim of depreciation, in which, the assessee filed a Cross Objection, questioning the correctness of the orders passed by the CIT(A), treating the expenditure as capital expenditure. The Tribunal considered the appeal and the Cross Objection and by the impugned order, allowed the Cross Objection and held that the expenditure to be Revenue. Consequently, the appeal filed by the Revenue was dismissed as infructuous. Challenging the said order, the Revenue is before us. 5. Mr.S.Rajesh, learned Standing counsel for the appellant/Revenue, would vehement....

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....R 74) (Gujarat HC)], in the case of Commissioner of Income Tax Vs. Anand Gum Industries [(154 ITR 680) (Rajasthan HC)] and in the case of Commissioner of Income Tax Vs. Birla Jute Manufacturing Co., Ltd., [(182 ITR 497) (Calcutta HC)]. 7. By referring to the above decisions, the learned counsel for the respondent/assessee, submitted that the Tribunal applied the proper test and concluded that the expenditure is Revenue in nature. 8. As could be seen from the observations of the Hon'ble Supreme Court of India in the case of Empire Jute Co., Ltd.,(cited supra), wherein it is held that if the advantage consists merely in facilitating the assesses's trading operations or enabling the management and conduct of the assesses's bu....