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| The Tax Publishers2020 TaxPub(DT) 2364 (Mum-Trib) INCOME TAX ACT, 1961
Section 37(1)
Expenditure on training to operate and execute product was merely training expenditure to train assessee's employees qua new products. Assessee did not gain any benefit of enduring in nature. Accordingly, expenditure was rightly claimed as revenue expenditure.
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Capital or revenue expenditure - Expenditure on training to operate and execute product - -
Assessee commenced its business of mining division in India. The said division was responsible for resolving the technical issues faced by the customers and also to enter into maintenance and repair contract for the mining machines which the Liebherr group may have sold to its customers in India. Accordingly, technical and product specialists of Liebherr group provided training to assessee's employees on resolving complications in the imported machines. Assessee claimed deduction of expenditure incurred on training of employees provided to operate and execute such product. AO treating the same as capital expenditure and allowed only 1/5th of said expenditure. Held: Expenditure was merely training expenditure to train assessee's employees qua, new products. Assessee did not gain any benefit of enduring in nature. Accordingly, expenditure was rightly claimed as revenue expenditure.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2010-11 to 2014-15
INCOME TAX ACT, 1961
Section 32(1)
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