Commissioner of Income-tax-3 v. E India Biz.Com Pvt. Ltd
[Citation -2015-LL-0224-38]
| Citation | 2015-LL-0224-38 |
|---|---|
| Appellant Name | Commissioner of Income-tax-3 |
| Respondent Name | E India Biz.Com Pvt. Ltd. |
| Court | HIGH COURT OF DELHI AT NEW DELHI |
| Relevant Act | Income-tax |
| Date of Order | 24/02/2015 |
| Assessment Year | 2007-08 |
| Judgment | View Judgment |
| Keyword Tags | consultancy services • enduring benefit • question of law • advance payment • capital expenditure • revenue expenditure |
| Bot Summary: | The Assessing Officer had, for the concerned period, i.e. A.Y.2007-08 brought to tax the sum of 1,25,49,302/- and another sum of 44,324/- claimed by the assessee towards depreciation. The assessee had deputed expenses against consultancy services at 1,43,62,884/-. At the outset, we notice that the ITAT had relied upon the decision of this Court reported as CIT v. Indiavisit.com Private Limited 2009 Taxmann 164 whereby, after considering the judgments of the Supreme Court on the issue as to whether such expenditure should properly fall within the capital or revenue stream, and alluding to Empire Jute Company Ltd. v. CIT 1980 ITR 1 and Alembic Chemical Works Company Ltd. v. CIT 1989 ITR 377, the Court held as follows: 7. Considered in the light of these principles enunciated by the Supreme Court, it is clear that just because a particular expenditure may result in an enduring benefit would not make such an expenditure of a capital nature. What is to be seen is what is the real intent and purpose of the expenditure and as to whether there is any accretion to the fixed capital of the assessee. In the case of expenditure on a website, there is no change in the fixed capital of the assessee. Although the website may provide an enduring benefit to an assessee, the intent and purpose behind the purpose for a website is not to create an asset but only to provide a means for disseminating the information about the assessee. |