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| The Tax Publishers2020 TaxPub(DT) 4733 (Ahd-Trib) INCOME TAX ACT, 1961
Section 37(1)
Assessee had been in the business of manufacturing of pesticides since last seven years and practice of getting the product tested with analytical report was being followed by assessee since earlier years and, therefore, no enduring benefit arose to assessee by incurring Product Development Expenditure and expenses were to be treated as revenue in nature.
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Capital or revenue expenditure - Product development expenses - No enduring benefit -
Assessee engaged in manufacturing as well as trading of Pesticides claimed deduction of Product Development Expenditure. AO held the expenses as of capital in nature. Held: Assessee had purchased and sold the product which were tested as per the analytical report. It had been in the business of manufacturing of pesticides since last seven years and practice of getting the product tested with analytical report was being followed by assessee since earlier years. Therefore, no enduring benefit arose to assessee and expenses were to be treated as revenue in nature.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. :
INCOME TAX ACT, 1961
Section 40(a)(i)
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