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Reliance Industries - capital expenditure

Supreme Court of India·2019·ITR
Facts

Reliance incurred substantial expenditure on technology acquisition and capacity enhancement.

Issue

Capital vs revenue expenditure characterisation.

Held

Enduring advantage test - if expenditure creates an enduring benefit, it is capital. One-time payment for technology that yields years of revenue is capital.

Ratio

Capital vs revenue is fact-specific; enduring benefit is the primary criterion.

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