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| The Tax Publishers2019 TaxPub(DT) 4346 (Mum-Trib) INCOME TAX ACT, 1961
Section 37(1)
Where assessee was engaged in business of providing medical equipments on loan basis then cost of such equipments was amortizable over useful life of such equipments.
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Capital or revenue expenditure - Assessee engaged in providing medical equipments to hospitals on returnable basis - -
Assessee loaned certain medical instruments, equipment needed for surgical fixation, correction and regeneration of human skeleton. These were supplied to hospitals/doctors on returnable basis. The useful life was estimated to be 3 years and accordingly, expenditure was amortized over a period of 3 years. During the relevant assessment year, assessee claimed proportionate deduction. AO rejecting accounting methodology adopted by assessee, disallowed amorization as claimed by assessee under section 37(1) and treating the same as capital expenditure, allowed depreciation thereon. Held: Treating loaner sets expenditure as capital expenditure was not in accordance with law and therefore, deduction was allowable under section 37(1).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2012-13 & 2013-14
INCOME TAX ACT, 1961
Section 37(1)
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