Existing product up-gradation expense allowable as revenue expense

Mahale Behr India Pvt. Ltd. Vs DCIT (ITAT Pune)

The issue in the present appeal relates to whether or not the expenditure incurred on testing and validation of the products is capital in nature. During the previous year relevant to the assessment year under consideration, the appellant incurred expenditure of Rs.2,45,34,542/- on testing and validation, out of which a sum of Rs.1,02,94,971/- was recovered from the customers and balance of product development expenditure of Rs.1,42,39,571/- was claimed as revenue expenditure. However, the Assessing Office

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