Commissioner of Income-tax-III, Hyderabad v. Social Media India Ltd - 2014-LL-1223-46

Citation	2014-LL-1223-46
Appellant Name	Commissioner of Income-tax-III, Hyderabad
Respondent Name	Social Media India Ltd.
Court	HIGH COURT OF HYDERABAD FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH
Relevant Act	Income-tax
Date of Order	23/12/2014
Assessment Year	2009-10
Judgment	View Judgment
Keyword Tags	capital expenditure • revenue expenditure • enduring in nature • question of law • business asset • loss incurred • earnest money • capital loss • revenue loss • security deposit
Bot Summary:	In the facts and circumstances of the case, whether the Hon ble Tribunal is correct in law in directing the Assessing Officer to allow the Security Deposits and earnest money deposits for obtaining the advertisement business which was subsequently written off treating the same as Revenue Expenditure, when the said amounts are liable to be disallowed 2. In the facts and circumstances of the case, whether the Hon ble Tribunal is correct in law in holding that no asset has been created without appreciating that the amount utilized for space for advertisement is for profit making asset which is enduring in nature and thereby the expenditure thereon is capital expenditure 3. In the facts and circumstances of the case, whether the Hon ble Tribunal is correct in law in treating the rental deposits made for setting of Study Abroad Centres as revenue expenditure without appreciating that the advances are towards acquiring business asset, the benefit from which is enduring in nature 4. In the facts and circumstances of the case, whether the Hon ble Tribunal is correct in law in setting aside the issue of allowability of advance paid to M/s. Shreya Broadcasting Corporation towards advertising contract, although it constitutes a Capital loss 5. In the facts and circumstances of the case, whether the Hon ble Tribunal is correct in law in directing the Assessing Officer to treat the loss of advance as revenue in nature, while the same constitutes a capital loss Out of five questions, the last two questions, namely, questions 4 and 5 are not pressed by Mr. B. Narasimha Sarma. After reading the judgment of the learned Tribunal, it appears, on appreciation of fact, the learned Tribunal found that the revenue loss incurred in connection with carrying on business, cannot be termed to be capital. The learned Tribunal, on appreciation of fact, has granted the relief.

THE HON BLE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND HON BLE SRI JUSTICE SANJAY KUMAR I.T.T.A.No.718 of 2014 DATED:23.12.2014 Between: Commissioner of Income Tax-III, Hyderabad. Appellant And M/s.Social Media India Ltd., Hyderabad. .Respondent HON BLE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND HONBLE SRI JUSTICE SANJAY KUMAR I.T.T.A.No.718 of 2014 Judgment: (per Hon ble Chief Justice Sri Kalyan Jyoti Sengupta) This appeal is sought to be preferred and admitted against judgment and order of learned Tribunal dated 28.5.2014 by Revenue in relation to assessment year 2009-2010 on following suggested questions of law: 1. In facts and circumstances of case, whether Hon ble Tribunal (ITAT) is correct in law in directing Assessing Officer to allow Security Deposits and earnest money deposits for obtaining advertisement business which was subsequently written off treating same as Revenue Expenditure, when said amounts are liable to be disallowed ? 2. In facts and circumstances of case, whether Hon ble Tribunal (ITAT) is correct in law in holding that no asset has been created without appreciating that amount utilized for space for advertisement is for profit making asset which is enduring in nature and thereby expenditure thereon is capital expenditure ? 3. In facts and circumstances of case, whether Hon ble Tribunal (ITAT) is correct in law in treating rental deposits made for setting of Study Abroad Centres as revenue expenditure without appreciating that advances are towards acquiring business asset, benefit from which is enduring in nature ? 4. In facts and circumstances of case, whether Hon ble Tribunal (ITAT) is correct in law in setting aside issue of allowability of advance paid to M/s. Shreya Broadcasting Corporation towards advertising contract, although it constitutes Capital loss ? 5. In facts and circumstances of case, whether Hon ble Tribunal (ITAT) is correct in law in directing Assessing Officer to treat loss of advance as revenue in nature, while same constitutes capital loss ? Out of five (5) questions, last two questions, namely, questions 4 and 5 are not pressed by Mr. B. Narasimha Sarma. He would only argue in relation to question Nos. 1,2 and 3. So far as question Nos. 1 and 2 are concerned, they can be dealt with by us. After reading judgment of learned Tribunal, it appears, on appreciation of fact, learned Tribunal found that revenue loss incurred in connection with carrying on business, cannot be termed to be capital. learned Tribunal, on appreciation of fact, has granted relief. We do not want to interfere with same as no question of law is involved. As far as question No.3 is concerned, nothing has been decided by learned Tribunal as it has only remitted matter for fresh decision. Hence, we dismiss appeal. No order as to costs. K.J. SENGUPTA, CJ SANJAY KUMAR, J 23rd December, 2014 Pnb Commissioner of Income-tax-III, Hyderabad v. Social Media India Ltd

Metadata

Judgment