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TMI Blog2013 (9) TMI 331X X X X Extracts X X X X X X X X Extracts X X X X ..... essment order under Section 143(3) was passed on 28th February,2006 accepting the loss returned. 3. On 29.2.2008 notice under Section 263 of the Income Tax Act, 1961 was issued by the Commissioner of Income Tax (Appeals)-IV, New Delhi. Thereafter an order under Section 263 of the Income Tax Act, 1961 was passed on 28.3.2008 setting aside the order under Section 143(3) of the Income Tax Act, 1961 dt. 28.2.2006 and the Assessing Officer was directed to verify the nature of expenditure incurred in relation to an Insurance portal and decide the issue afresh as per law. Insurance portal in question was a web site named "Assure India.Com". The assessee carried the matter in appeal and the 'C' bench of the Tribunal in ITA no. 1614/Del/2008 order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he impugned assessment order, I find that the ld. AO has followed the directions issued by the ld.CIT-IV to treat the entire expenditure of Rs.94,49,039/- as capital expenditure and disallow the same. Therefore, I have no hesitation in holding that the ld. AO has framed the assessment order in question strictly as per the directions issued by the ld.CIT- IV, New Delhi which have subsequently been upheld by the Hon'ble ITAT, vide order dt. 25.9.2009. In view of the aforesaid, the action of the Assessing Officer is being sustained." 7. On the additional ground raised, the Commissioner of Income Tax (Appeals) at para 5 of his order held as under. "5. As regards additional ground raised by the appellant company to allow the neces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer had followed the directions issued by the Ld.CIT-IV to treat the entire expenditure of Rs.94,49,039/- as capital expenditure and disallow the same and that the Assessing Officer had framed the impugned assessment order strictly as per the directions issued by Ld.CIT-IV, New Delhi subsequently allowed to have been upheld by the Hon'ble ITAT vide order dt. 25.9.2009. 4. That without prejudice to the above grounds, directions deserve to be issued to Assessing Officer to allow the deduction on account of the above expenditure in the relevant AYs viz. 2000-01, 2001-02 and 2002-03. 5. That without prejudice to the above grounds, in case the views of the authorities below by treating the above amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prejudice it is held to be capital expenditure depreciation has to be allowed. He relied on the following case laws. CIT vs. Mahalakhsmi Textile Mills, 66 ITR 701 (S.C.) Calcutta Steel Containers Ltd. vs CIT, 112 ITR 995 CIT vs. Jindal Equipment Leasing Consultancy Services Ltd. 325 ITR 87 11. Alternatively he submitted that if project completion method adopted by the assessee company is not accepted, then the expenditure should be allowed in the respective years. 12. The Ld.D.R. on the other hand controverted the arguments of the assessee and submitted that the expenditure is in the capital field. He relied on the order of the CIT passed under Section 263 of the Income Tax Act, 1961 as well as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - - 9. Vehicles running & Maintenance 126,582 77,684 - - 10. Repairs & Maintenace - 96,888 49,000 - 11. Legal & Professional charges 686,909 1,124,463 9,000 - 12. Advt. & Publicity 41,555 58,103 - - 13. Misc.exp. 1,128,841 67,494 498,761 4,184 Total : Rs. 4,813,422 3,882,622 863,811 4,184 15. A perusal of the nature of expenses demonstrates that these are in the revenue field. The Hon'ble Delhi High Court in the case of India Visit.Com(P) Ltd. (supra) held as follows. "Held : 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 expendit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... about assessee's business activities amongst its clients is revenue expenditure even though resulting in enduring benefit." 16. Applying the proposition laid down by the Jurisdictional High Court to the facts of this case, and in view of the nature of expenses listed above, we have no hesitation to come to a conclusion that the expenditure in question is in the revenue field. 17. Coming to the argument of the Ld.D.R. that the assessee was capitalizing the expenditure in the earlier years, as it followed project completion method, we find that the Ld.D.R. has not correctly appreciated the issue of method of accounting. Applying project completion method does not mean that the expenditure which is not claimed in the current year, becomes a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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