CIT Vs Tata SSL Ltd (Mumbai High Court) – by paying the impugned charges to Mahanagar Gas Ltd., the assessee did not acquire any right or control over the gas facility. The Tribunal held that the facilities served the sole purpose of supplying the gas to the assessee’s work and, therefore, it was an integral part of the profit earning process and facilitated in carrying on the assessee’s business more efficiently without giving any enduring benefit to the assessee.
Apex Court has held in the case of Empire Jute Co. (supra) that an expenditure even if incurred for obtaining an advantage of enduring benefit may be on revenue account. In the case of Excel Industries Ltd. (supra) this Court has held that payments made by an assessee to the Electricity Board to get electricity by providing an overhead service line would be revenue expenditure. In the present case, the finding recorded by the Tribunal is that the assets remained the property of Mahanagar Gas Ltd. and that the sole object of payment was to get gas to facilitate the manufacturing activity carried on by the assessee.
On the facts and in the circumstances of the case and in law, the Tribunal was justified in allowing the claim of the assessee company of Rs.45,21,000/- as revenue expenditure being one time payment made to Mahanagar Gas Ltd. by the assessee company towards CNG connection charges even though such payment was made as capital contribution towards cost of service metre, twin steam engine regulator, meter regulating station and cost of pipelines up to meter regulating stations and was a payment made before commencement of gas supply
Commissioner of Income Tax-2 V/s. TATA SSL Ltd.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INCOME TAX APPEAL NO. 1321 OF 2010
Commissioner of Income Tax-2, V/s.TATA SSL Ltd.
JUDGMENT RESERVED ON: 7TH JUNE, 2011
JUDGMENT PRONOUNCED ON : 8TH JUNE, 2011
