Dismissing the appeal of the revenue the Court held that the lump sum payment made by the assessee for the development of infrastructure for uninterrupted power supply to it was revenue expenditure under section 37(1), though the assessee had parted with substantial funds to the company, the capital asset continued to remain the property of the company. (AY. 2010-11)
CIT v. Hanon Automative Systems India Private Ltd. (2020) 429 ITR 244/(2021) 277 Taxman 454 / 201 DTR 421(Mad.)(HC)
S. 37(1) : Business expenditure-Capital or revenue-Payment made to an entity under an agreement for additional infrastructure for augmenting continuous supply of electricity-No asset acquired-Held to be allowable as revenue expenditure.