SIGN IN SUBSCRIBE

News Update

US Nurse convicted of killing 17 patients - 700 yrs of jail-term awardedGST - Payment of pre-deposit through Form GST DRC-03 instead of the prescribed Form APL-01 - Petitioner attributes it to technical glitches - Respondent is the proper authority to decide the question of fact: HC2nd Session of India-Nigeria Joint Trade Committee held in AbujaGST - Since SCN is bereft of any details and suffers from infirmities that go to the root of the cause, SCN is quashed and set aside: HC1717 candidates to contest elections in phase 4 of Lok Sabha ElectionsGST - Once Appellate Authority comes to the conclusion that SCN was issued by an officer who was not competent; reply was also considered by an incompetent authority and the Competent Authority had not applied its independent mind, Appellate Authority could not have assumed original jurisdiction and proceeded further with the matter: HC7th India-Indonesia Joint Defence Cooperation Committee meeting held in New DelhiGST - Neither the Show Cause Notice nor the order spell out the reasons for retrospective cancellation of registration, therefore, the same cannot be sustained: HCMining sector registers record production in FY 2023-24GST - If the proper officer was of the view that the reply is unclear and unsatisfactory, he could have sought further details by providing such opportunity - Having failed to do so, order cannot be sustained - Matter remanded: HCAnother quake of 6.0 magnitude rocks Philippines; No damage reported so farI-T - Initial burden of proof rested on assessee to substantiate his claim of having incurred expenditure on improvement of property: ITATTrade ban: Israel hits back against Turkey with counter-measuresI-T - Agricultural income can be treated by ITO as undisclosed income in absence of any substantial / corroborative material to prove same: ITATCanada arrests three persons in alleged killing of Sikh separatistI-T - Income from sale of property has to be classified & characterised only in manner of computation as per section 45(2): ITATCus - When there is nothing on record to show that appellant had connived with other three persons to import AA batteries under the guise of declaring goods as Calcium Carbonate, penalty imposed on appellant are set aside: HCCongress fields Rahul Gandhi from Rae Bareli and Kishori Lal Sharma from AmethiGST -Since both the SCNs and orders pertain to same tax period raising identical demand by two different officers of same jurisdiction, proceedings on SCNs are clubbed and shall be re-adjudicated by one proper officer: HCFormer Jharkhand HC Chief Justice, Justice Sanjaya Kumar Mishra appointed as President of GST TribunalSale of building constructed on leasehold land - GST implicationI-T - Interest received u/s 28 of Land Acquisition Act 1894 awarded by Court is capital receipt being integral part of enhanced compensation and is exempt u/s 10(37): ITATGirl students advised by Pak college to keep away from political events
 
I-T - Expenditure incurred for upgradation of technology, because of rapid replacement and constant need for existence, are of revenue nature: ITAT

By TIOL News Service

KOLKATA, JAN 01, 2018: THE ISSUE BEFORE THE TRIBUNAL IS - Whether when expenditure are made in relation to technology upgradation charges, which requires frequent replacement due to rapid change in technology and constant need for upgradation, the same will be treated as revenue in nature. YES IS THE ANSWER.

Facts of the case:

The Assessee-company, engaged in the business of providing broadband and cable services, filed its return for the AY under consideration. During the course of assessment proceedings, the AO observed that the Assessee had debited in its P&L Account technology upgradation expenses and therefore, asked the Assessee as to why the same should not be treated as capital expenditure. The Assessee contended that the said expenditure was incurred for maintenance of the transmitting system and in the process of such maintenance, it had incurred some expenses which were of revenue nature. However, the AO did not satisfied with the reply of the Assessee and treated the same as capital expenditure and accordingly make disallowance.

Tribunal held that,

++ the CIT(A) on verification of the bills for these upgradation charges, had come to a conclusion that the cost of spares are less than Rs 5,000/- and are frequently replaceable which does not accrue any enduring benefit to the assessee. We find that the case laws relied upon by the counsel for the assessee in the case of Southern Roadways Ltd and also in Asahi India Safety Glass Ltd squarely applies to the case of the assessee. We also find that the decision of the Supreme Court in the case of Empire Jute Co., where their Lordships had duly distinguished the enduring benefit in the revenue field and enduring benefit in the capital field. They had held that pursuant to incurrence of expenses, if there is some enduring benefit in the revenue field, then the same would only amount to revenue expenditure. We hold that the expenditure incurred by the assessee towards technology upgradation charges which requires frequent replacement due to rapid change in technology and constant need for upgradation would only be revenue in nature. Hence we do not find any infirmity in the order of the CIT(A) in this regard.

(See 2018-TIOL-06-ITAT-KOL)


POST YOUR COMMENTS
   

TIOL Tube Latest

TIOL Tube
Shri N K Singh, recipient of TIOL FISCAL HERITAGE AWARD 2023, delivering his acceptance speech at Fiscal Awards event held on April 6, 2024 at Taj Mahal Hotel, New Delhi.

TOP NEWS

AR not Afar by SK Rahman

VISION 360



Shri Ram Nath Kovind, Hon'ble 14th President of India, addressing the gathering at TIOL Special Awards event.

TII LATEST

TIOLCORPLAWS LATEST