2021 (1) TMI 15

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....ards fees to HUDA is a one-time expenditure and the benefit arising out of this expenditure is of enduring in nature, and therefore it is not Revenue expenditure in its nature. 2. Assessee is a private limited company incorporated on 30/08/2004 with an aim to establish and Manage Medanta The Medicity to provide all types of health, pathology and medical facilities. For the assessment year 2012-13 they have filed their return of income on 30/9/2011 declaring nil income after setting of brought forward losses to the tune of Rs. 48, 89, 23, 321/-under normal provisions and income of Rs. 72, 28, 29, 359/-under section 115 JB of the Income Tax Act, 1961 (for short "the Act"). During the assessment proceedings, learned Assessing Officer notice....

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....l position, Ld. CIT(A) reached a conclusion that the payment made by the assessee to HUDA is Revenue expense in nature and allowable towards deduction. 4. It is the argument of the Ld. DR that the one-time expenditure made by the assessee to HUDA use enduring benefit to the assessee over a period of time and therefore it has to be classified as capital expenditure and not allowable as Revenue expenditure and on that score the finding of the Ld. CIT(A) suffers legal infirmity; whereas it is the submission on behalf of the assessee by the Ld. AR that the facts of Aravind Mills Ltd ((supra) are completely different from the facts involved in this case and the Ld. CIT(A) rightly followed the decision of the Hon'ble Apex Court in the case of ....

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....e activities/business of the hospital operates. 6. In Arvind Mills Ltd (supra), as rightly culled out by the Ld. CIT(A), the Hon'ble court held that in deciding whether an expenditure is a capital are Revenue expenditure, the question of voluntary and/or involuntary payment becomes immaterial and it is only the nature of expenditure that determines the issue, and in such case the owner got the advantage of betterment of land in question and there was no manner of doubt that the valuation of the land had increased because of the improvements effected on the land, but such payments had no direct nexus with the day-to-day running of the business. However insofar as the case on hand are concerned, there is no dispute as to the facts recorded....