COMMISSIONER OF INCOME TAX Vs. MUNJAL SHOWA LTD.

JUDGEMENT

(1.) In this batch of appeals, the controversy raised being similar, they were heard analogously and are disposed of by a common order. For the sake of clarity and convenience, we shall refer to the facts in ITA No.56/2010 where the revenue has called in question the defensibility of the order dated 9.1.2009 passed by the Income Tax Appellate Tribunal, Delhi Bench 'D. (for short 'the tribunal.) pertaining to the assessment year 1994-95. The revenue has raised the following two questions as questions of law:

(2.) The basic facts which are requisite to be stated are that the assessee - respondent is engaged in the business of manufacture of shock absorbers used in automobile vehicles. It incurred expenses on travel and stay of foreign technical personnel of M/s Showa Corporation, Japan and also on design and drawing charges payable to M/s Showa Corporation, Japan. The assessee treated the same as deferred revenue expenditure in the accounts but while filing the return claimed the entire expenses as revenue expenditure. Originally, the assessing officer allowed the claim on the basis of entries in the books of accounts. The said order of assessment was framed under Section 143(3) of the Income Tax Act, 1961.

(3.) The said original assessment came to be dealt with by the CIT(A) who treated the same as capital expenditure. The assessee carried the matter before the tribunal. The tribunal by its earlier order remitted the matter to the file of the assessing officer to examine whether the expenses were actually capital or revenue. After the remit, the assessing officer treated the expenses as capital expenditure which was confirmed by the CIT(A).