Commr.Of Income Tax-Iv,Kolkata vs Berger Paints India Ltd. on 8 December, 2015
month of March, 2007. The A.O. in the remand report did not
doubt the genuineness of the expenses incurred by the
assessee. Further, the authorities below found that it is capital
in nature because it provides enduring benefit to the assessee.
This question is answered by the Hon'ble Calcutta High Court
in the case of CIT vs. Berger Paints (India) Ltd., (supra) in
favour of the assessee. Considering the nature of business of
assessee and that expenses in question were incurred for
earning business income, therefore, it was not capital in
nature and would not provide any enduring benefit to the
assessee. The assessee submitted before A.O. that income on
this account has been accounted for during the year itself. The
submissions of assessee has not been disputed by the
authorities below. Therefore, on the same Head when income
is offered for taxation and expenses are incurred to earn the
income, therefore, such expenses were clearly revenue in
nature. The authorities below have failed to point-out as to
which capital have been generated out of incurring these
expenses. Therefore, the authorities below were not justified to
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ITA.No.1413/Del./2015 Times Publishing
House Ltd., New Delhi.