Court held that (i).he expenses incurred on purchase of computer software for upgrading existing software for solving specific problems of users was to bring greater efficiency in the functioning of assessee’s business and hence was of revenue nature. Following Supreme Court decision in case of Empire Jute Co Ltd v. CIT ( 1980 ) 124 ITR 1 (SC) the High Court further held that the test of enduring benefit is not conclusive test and cannot be applied blindly and mechanically without regards to particular facts of a given case. (ii):The expenses incurred to ensure good health and safety of its employees and to provide accident free environment are of revenue nature and the test of one-time payment or not is not the sole test to determine nature of expenditure. (ITA. No 73 of 2016 dt. 25-04-2018)(AY. 2008-2009)
PCIT .v. Holcim Services (South Asia) Ltd (2018) 255 Taxman 392 (Bom)(HC)
S. 37(1) : Business expenditure – Capital or revenue -Purchase of computer software for up-gradation of existing computer software – Revenue expenditure even though it provides enduring benefit- Expenses for employees welfare -foster safe working environment is revenue expenditure – The test of one-time payment or not is not the sole test to determine nature of expenditure.