Capital or revenue expenditure !

Last updated: 05 September 2007

Court :
High Court

Brief :
Membership and entry of a dealer in the OTC Exchange was only on payment of non-refundable deposits, upon the non payment of which the assessee would have been termed as an "inactive" member. This payment could not be treated as one of an "enduring nature" and thus was deductible as revenue expenditure.

Citation :
Neset Holdings P. Ltd. Vs. C.I.T.

Capital or revenue expenditure Neset Holdings P. Ltd. Vs. C.I.T. 5/26/2005 (2006) 282 ITR 601 (Delhi) Case Fact: Whether amount paid to stock exchange as non-refundable deposits for acquiring OTC membership is a capital expenditure or revenue expenditure? Decision: Held by the Hon"ble court that as the membership and entry of a dealer in the OTC Exchange was only on payment of non-refundable deposits, upon the non payment of which the assessee would have been termed as an "inactive" member. This payment could not be treated as one of an "enduring nature" and thus was deductible as revenue expenditure.

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