In absence of enduring nature Product development expenses are revenue expense

ACIT Vs Setco Automobiles (ITAT Ahmedabad)

In the present case, the issue is about allowability of product development expenses which were held by A.O. be a capital in nature. We find that ld. CIT(A) while deciding the appeal for A.Y. 2002-03 and following it has given a finding that due to incurring of product development expenses, the installation capacity did not increase and assessee did not set up a separate and independent unit from manufacturing and no capital asset was brought into existence. He has further held that entries in the books of

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