1

Commissioner (A) is not empowered to enhance income a new source of income vide 82ITR 9Trib) 176
1

It is assessee’s choice to select a method for determining FMV of shares vide 81 ITR (Trib) (SN) 78
1

No TP adjustment of trade receivables in case of a debt-free company vide 81ITR (Trib) (SN) 94
1

To accord registration as a charitable institution under income tax dominant purpose must be charitable and satisfies the conditions laid down us 2(15) vide 426ITR108 despite having non charitable ancillary objects meant to achieve the dominant purpose
1

Transactions with dubious entities is reason enough for case reopening vide 421ITR624

machinery spares/tools vs enduring benefit test

ByCA Gopal Nathani

May 13, 2022

In judging the capital or revenue character of expenditure on tools or machinery spares the Tribunal in [2022] 27 ITR (Trib)-OL 241 (ITAT[Bang]) held that the test of enduring benefit is not the only criteria for concluding an item to be revenue or capital in nature. The bench on their look to the list of machinery spares found that they do not function as independent machines. The often referred pet decision of SC in Saravana Spinning Mills did not even help revenue in this case.

In this case the AO held that the items of spares /tools have a life beyond 12 months hence they are to be treated as capital in nature.