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Tpr Autoparts Mfg India Pvt. Ltd., New ... vs Dcit, Circle- 25(2), New Delhi on 13 December, 2019 cites

Empire Jute Co. Ltd vs Commissioner Of Income Tax on 9 May, 1980

"There may be cases where expenditure, even if incurred for obtaining advantage of enduring benefit, may, none the less, be on revenue account and the test of enduring benefit may break down. It is not every advantage of enduring nature acquired by an assessee that brings the case within the principle laid down in this test. What is material to consider is the nature of the advantage in a commercial sense and it is only where the advantage is in the capital field that the expenditure would be disallowable on an application of this test. If the advantage consists merely in facilitating the Assessee's trading operations or enabling the management and conduct of the Assessee's business to be carried on more efficiently or more profitably while leaving the fixed capital untouched, the expenditure would be on revenue account, even though the advantage may endure for an indefinite future. The test of enduring benefit is, therefore, not a certain or conclusive test and it cannot be applied blindly and mechanically without regard to the particular facts and circumstances of a given case. But even if this test were applied in the present case, it does not yield a conclusion in favour of the revenue. Here, by purchase of loom hours no new asset has been created. There is no addition to or expansion of the profit-making appararus of the assessee. The income-earning machine remains hat it was prior to the purchase of loom hours. The assessee is merely enabled to operate the profit making structure for a longer number of hours. And this ad arnage is clearly not of an enduring nature. It is limited in its a_ra:i:n to six months and, moreover, the additional working : _rs per week transferred to the assessee have to be utilised during the week and cannot be carried forward to the next week. It is, therefore, not possible to say that any advantage of enduring benefit in the capital field was acquired by the assessee 14 ITA No.4744/Del/2017 in purchasing loom hours and the test of enduring benefit cannot help the revenue."
Supreme Court of India Cites 3 - Cited by 743 - P N Bhagwati - Full Document

M/S. At & T Global Network Services ... vs Dcit, New Delhi on 18 September, 2017

In the instant case having regard to the nature of the business of the assessee and applying the principle of law enunciated in Mysore Spun Concrete Pipe Pvt. Ltd.'s case [1992] 194 ITR 159 (Kar), the Tribunal has reached a conclusion that the moulds in question do not enhance the capacity of the existing machines and are mere replacements for the moulds damaged during the process of manufacture of glass. It is also evident from the format of the question proposed by the Revenue, that the finding of the Tribunal to the effect that the expenditure in question was incurred by the assessee on the "replacement" of the moulds is not under challenge.
Income Tax Appellate Tribunal - Delhi Cites 42 - Cited by 89 - Full Document
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