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The Tax Publishers Infrastructure development expenses - whether revenue spend or capital spend Legal expenses - whether capital or revenue spend if in relation to plant *Facts:* Assessee and revenue had cross appeals in this case. Revenue's cross appeal was that assessee's spend for infrastructure development expenses arising out of a 99 year old lease from its landlord was a capital expenditure and thus AO allowed 10% depreciation on the same disallowing 90% alleging it to be of capital in nature. On appeal CIT(A) reversed the stand of the AO agreeing with the plea of the assessee that under a separate infrastructure agreement entered into with its lessor Sri City they were supposed to incur this spend and maintain common facilities and amenities outside their leased property. This was only to render more efficient operations no matter it being of enduring nature to the assessee accordingly they had claimed the same as revenue expenditure. Assessee had also spent Rs. 90.47 towards legal expenses to Khaitan & Co of which part of it was disallowed by AO as the same was spent for plant. On appeal CIT(A) reversed the same holding that legal expenses for acquiring plant was also a revenue spend. On higher appeal by the revenue on both above points - Held against the revenue/in favour of the assessee that the disallowances were revenue in nature and were allowable. *Applied:* Leasehold development spends - Empire Jute Co. v. CIT(SC) reported in (1980) 124 ITR 1 (SC) : 1980 TaxPub(DT) 1083 (SC). L.H. Sugar Factory & Oil Mills (P.) Ltd. v. CIT (1980) 125 ITR 293 (SC) : 1980 TaxPub(DT) 1125 (SC). Kellogg India (P) Ltd. v. ACIT (2020) 186 ITD 10 (Mum-Trib) : 2020 TaxPub(DT) 3573 (Mum-Trib) Legal expenses - CIT v. United Breweries Ltd. (2010) 36 DTR 80 (Karn-HC) : 2010 TaxPub(DT) 1300 (Karn-HC) *Case:* Ball Beverage Packaging (India) (P) Ltd. v. ACIT 2023 TaxPub(DT) 4523 (Del-Trib)

The Tax Publishers

Infrastructure development expenses - whether revenue spend or capital spend

Legal expenses - whether capital or revenue spend if in relation to plant

Facts:

Assessee and revenue had cross appeals in this case. Revenue's cross appeal was that assessee's spend for infrastructure development expenses arising out of a 99 year old lease from its landlord was a capital expenditure and thus AO allowed 10% depreciation on the same disallowing 90% alleging it to be of capital in nature. On appeal CIT(A) reversed the stand of the AO agreeing with the plea of the assessee that under a separate infrastructure agreement entered into with its lessor Sri City they were supposed to incur this spend and maintain common facilities and amenities outside their leased property. This was only to render more efficient operations no matter it being of enduring nature to the assessee accordingly they had claimed the same as revenue expenditure.

Assessee had also spent Rs. 90.47 towards legal expenses to Khaitan & Co of which part of it was disallowed by AO as the same was spent for plant. On appeal CIT(A) reversed the same holding that legal expenses for acquiring plant was also a revenue spend.

On higher appeal by the revenue on both above points -

Held against the revenue/in favour of the assessee that the disallowances were revenue in nature and were allowable.

Applied:

Leasehold development spends -

Empire Jute Co. v. CIT(SC) reported in (1980) 124 ITR 1 (SC) : 1980 TaxPub(DT) 1083 (SC).

L.H. Sugar Factory & Oil Mills (P.) Ltd. v. CIT (1980) 125 ITR 293 (SC) : 1980 TaxPub(DT) 1125 (SC).

Kellogg India (P) Ltd. v. ACIT (2020) 186 ITD 10 (Mum-Trib) : 2020 TaxPub(DT) 3573 (Mum-Trib)

Legal expenses -

CIT v. United Breweries Ltd. (2010) 36 DTR 80 (Karn-HC) : 2010 TaxPub(DT) 1300 (Karn-HC)

Case: Ball Beverage Packaging (India) (P) Ltd. v. ACIT 2023 TaxPub(DT) 4523 (Del-Trib)