Tax deduction

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siddhi (Querist)
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20 November 2012 sir ,
i have 1 doubt related to income tax deduction.If assessee has incurred an education expenditure , for upgrading the knowledge which will help him in his new project ...what will be nature of that expenditure? capital or revenue? can it be allowed as an expenditure u/s 37?

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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20 November 2012 It is revenue expenditure and be allowed as deduction in that year.

siddhi

siddhi (Querist)
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20 November 2012 k sir thanks ,
can u plz tell me the reasons why it is revenue exp?

CA Piyush Chandanmal Rakhecha

CA Piyush Chandanmal Rakhecha (Expert)
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21 November 2012 Dear Siddhi,

There is very thin line between judging any expenditure as Revenue / Capital.
Expenditure incurred on education is revenue expenditure, & is allowable expenditure.
But though it will help assessee to enhanced knowledge about new project, he can treat expenses on Books / software / technical fees paid etc. as capital expenditure.
But it is challengeable assessee have to prove value addition to new project.

siddhi

siddhi (Querist)
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23 November 2012 k sir thanx

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