hot water expands
I'm no expert, that's for sure, but from the perspective of physics, there is a simple reason why the expansion tank must be on the cold water supply line side of the tank instead of the hot side. As the name implies, an expansion tank collects water that has "expanded" during the heating process---that is, cold water expands when it gets hot. If we assume that a system is perfectly insulated, the hot water pipes should already be hot and, therefore, fully expanded (in a perfect world they would be the same temperature as the tank). Therefore, the only place left for the expanding water in the tank is the cold water supply. An expansion tank collects the expanding hot water on the supply side before it exerts any more pressure on the system. As hj said, it protects your system if the shut-off valve is closed or if you have a unidirectional shut-off valve. Again, I'm no expert, but this makes sense to me.