revenue expenditure

Subsidy a capital or revenue expense: Recent decision of Delhi HC in Bhushan Steel

Income Tax - The government would introduce a scheme to provide a subsidy for advancing the development of industries mainly in backwards areas. The assistance was provided primarily for recouping the assessee on the expenditure incurred for the establishment of the industry. ...

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Bank Revenue Audit tip on Penal Interest

Income Tax - In CBS environment , most of the times , Management response is usually as All charges calculation and charging is done by system , there's no chance of under recovery....

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Expenses on transfer of lease-Tax Implications

Income Tax - When a lease is transferred it involves payment of some transfer charges to the lessor for the transfer of lease as well as payment of stamp duty on registration of lease in the name of the new lessee. The question here arises is that whether transfer charges and stamp duty paid for transfer of lease would be allowable as revenue deductio...

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Receipts from sale of carbon credits – revenue or capital in nature?

Income Tax - The alarming rate of ever increasing pollution is a matter of concern for each of us especially those living in the territory of Delhi NCR. Recently, the Hon’ble Supreme Court termed that living in Delhi is like living in a gas chamber. In past, several measures have been taken to curb the pollution and make life of dilliwallahs comfor...

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Allowability of Investment Depreciation Reserve provision made by banks

Income Tax - Allowability of provision made by banks for Investment Depreciation Reserve due to MTM for AFS & HFT and amortization of premium on HTM. Many banks are disallowed for the certain deductions which are to be made as per RBI statutory regulations to run business smoothly. There are differences of opinion regarding allowability of these i...

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PWC asked for clarity on taxation rules regarding payments made for acquiring spectrum

Income Tax - “There is no specific provision in Indian tax laws governing the deductibility of the payments made for acquiring spectrum,” a PwC report on the telecom sector said. With the allocation of spectrum, especially 3G being an issue of concern, rules governing the same in the taxation laws also assume significance. “Since, substantial am...

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Expense on obtaining ISO certificates are revenue expenditure

Red Chillies Entertainment Pvt. Ltd. Vs Asstt. Commissioner of Income Tax (ITAT Mumbai) - It was submitted by the assessee that ISO 27001 and ISO 9001:2008 certification are valid for a period of three years but they are neither intangible fixed asset nor transferrable. Hence, the expenditure incurred for obtaining such certificate is revenue in nature as the certificates can be withdraw...

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Brand Licensing Expenses allowed As Business / Revenue Expenses

Pr.CIT Vs. Nitrex Chemicals India Ltd. (Delhi High Court) - Whether payments made by the assessee to its holding company Nitrex Chemicals India Ltd for the use of its trademark and for the purpose of obtaining expertise in commerce, finance,manufacturing etc. amounted to revenue expenditure instead of capital expenditure?...

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Method of accounting can be changed if such change is bona fide and permissible under law

Commissioner of Income Tax II Vs Mapin Publishing Pvt Ltd. (Gujarat High Court at Ahmedabad): Tax Appeal No. 902 of 2013 - Change in method of accounting was bona fide and with the compliance of the Accounting Standard – AS 9 – Revenue Recognition issued by the Institute of Chartered Accountants of India and provisions of S.5 of the Act. ...

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Delhi High Court rules that additional provision for warranty is revenue expenditure

CIT Vs. Whirlpool of India Ltd. (Delhi High Court) - Recently, the Delhi High Court (High Court) in the case of CIT v. Whirlpool of India Ltd. (ITA No. 1154 of 2009) (Judgement date: 24 January 2011 Assessment Year 1996-97) held that additional provision for warranty made was not contingent liability ...

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Payment of compensation for obtaining vacant & peaceful possession of premises cannot be allowed as revenue expenditure

ITO Vs. Pritam Juice (ITAT Mumbai) - We have heard the rival submission and perused the relevant material on record in the light of precedents relied upon. The factual position has been elaborately noted in the foregoing paragraphs. To sum-up the facts, it is noted that Shri Kulwant Singh Kohli was the original owner of the three shops...

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Recent Posts in "revenue expenditure"

Subsidy a capital or revenue expense: Recent decision of Delhi HC in Bhushan Steel

The government would introduce a scheme to provide a subsidy for advancing the development of industries mainly in backwards areas. The assistance was provided primarily for recouping the assessee on the expenditure incurred for the establishment of the industry. ...

Read More
Posted Under: Income Tax |

Expense on obtaining ISO certificates are revenue expenditure

Red Chillies Entertainment Pvt. Ltd. Vs Asstt. Commissioner of Income Tax (ITAT Mumbai)

It was submitted by the assessee that ISO 27001 and ISO 9001:2008 certification are valid for a period of three years but they are neither intangible fixed asset nor transferrable. Hence, the expenditure incurred for obtaining such certificate is revenue in nature as the certificates can be withdrawn if the assessee does not adhere to the...

Read More

Bank Revenue Audit tip on Penal Interest

In CBS environment , most of the times , Management response is usually as All charges calculation and charging is done by system , there's no chance of under recovery....

Read More
Posted Under: Income Tax |

Brand Licensing Expenses allowed As Business / Revenue Expenses

Pr.CIT Vs. Nitrex Chemicals India Ltd. (Delhi High Court)

Whether payments made by the assessee to its holding company Nitrex Chemicals India Ltd for the use of its trademark and for the purpose of obtaining expertise in commerce, finance,manufacturing etc. amounted to revenue expenditure instead of capital expenditure?...

Read More

Expenses on transfer of lease-Tax Implications

When a lease is transferred it involves payment of some transfer charges to the lessor for the transfer of lease as well as payment of stamp duty on registration of lease in the name of the new lessee. The question here arises is that whether transfer charges and stamp duty paid for transfer of lease would be allowable as revenue deductio...

Read More
Posted Under: Income Tax |

Receipts from sale of carbon credits – revenue or capital in nature?

The alarming rate of ever increasing pollution is a matter of concern for each of us especially those living in the territory of Delhi NCR. Recently, the Hon’ble Supreme Court termed that living in Delhi is like living in a gas chamber. In past, several measures have been taken to curb the pollution and make life of dilliwallahs comfor...

Read More
Posted Under: Income Tax |

Allowability of Investment Depreciation Reserve provision made by banks

Allowability of provision made by banks for Investment Depreciation Reserve due to MTM for AFS & HFT and amortization of premium on HTM. Many banks are disallowed for the certain deductions which are to be made as per RBI statutory regulations to run business smoothly. There are differences of opinion regarding allowability of these i...

Read More
Posted Under: Income Tax |

Method of accounting can be changed if such change is bona fide and permissible under law

Commissioner of Income Tax II Vs Mapin Publishing Pvt Ltd. (Gujarat High Court at Ahmedabad): Tax Appeal No. 902 of 2013

Change in method of accounting was bona fide and with the compliance of the Accounting Standard – AS 9 – Revenue Recognition issued by the Institute of Chartered Accountants of India and provisions of S.5 of the Act. ...

Read More

Delhi High Court rules that additional provision for warranty is revenue expenditure

CIT Vs. Whirlpool of India Ltd. (Delhi High Court)

Recently, the Delhi High Court (High Court) in the case of CIT v. Whirlpool of India Ltd. (ITA No. 1154 of 2009) (Judgement date: 24 January 2011 Assessment Year 1996-97) held that additional provision for warranty made was not contingent liability ...

Read More

What is Budget?

What is the Budget? Why is it so important? Why does it affect all of us? And, above all, how does one interpret the budgetary lingo flying around? Union Budget is the annual report of India as a country. It contains the government of India's revenue and expenditure for the end of a particular fiscal year, which runs from April 1 to March...

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Posted Under: Income Tax |
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