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TMI Blog2021 (9) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... HELD THAT:- Disallowance of expenses on a presumption basis with regard to the income received on syndication services has been a repetitive issue from the years 2006-07 to 2014-15. This issue has been decided by the Hon ble Delhi High Court in assessee s own case in assessment years 2004-05 and 2005-06 [ 2016 (3) TMI 1320 - DELHI HIGH COURT] and further in assessment year 2006-07, 2007-08 and 2008-09[ 2017 (9) TMI 1355 - DELHI HIGH COURT] , the issue has been adjudicated in favour of the assessee. Software Expenses and Depreciation claim of software - AO disallowed of the expenditure holding that the software utilized is capital in nature. The depreciation on software claimed @ 60% by the assessee has been scaled down to 25% by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penditure in case of amalgamation and demerger. Since, the expenditure is in connection with the valuation of shares relating to merger, the same needs to be treated in accordance with the provisions of Section 35DD. Consultancy charges paid revenue swayed away by the mention of specific project expenses and treated them as capital expenditure in nature whereas the fact remains that the consultant has been paid for providing services in development of new products and enhancement of existing features on the website which cannot be treated as a new arena of the business operations. Hence, the amount paid should be treated as revenue expenditure. - ITA No. 3124/Del/2018, 2210/Del/2018 (Asstt. Year : 2014-15) - - - Dated:- 6-8-2021 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls)-16 has erred both in law and on facts in upholding disallowance of entire sum of ₹ 600000/- towards consultancy charges for valuation of shares upon merger of another group company, claimed by the appellant company as revenue expenses. 1.1 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that the expenses on merger are allowed @20% in five consecutive years u/s 35DD. Accordingly, ₹ 120000/- should have been allowed in this AY and balance in next 4 years. 2. That the learned Commissioner of Income Tax (Appeals)-16 has erred both in law and on facts in upholding disallowance of sum of ₹ 5,50,000/- towards consultancy charges for consultancy related to the ongoing website magicbri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2014-15. This issue has been decided by the Hon ble Delhi High Court in assessee s own case in assessment years 2004-05 and 2005-06 in ITA Nos. 178 188/2016 dated 14.03.2016 further in assessment year 2006-07, 2007-08 and 2008-09 in ITA No. 716, 724 753/2017 dated 06.09.2017, the issue has been adjudicated in favour of the assessee. Since, the issue has been repetitively held in favour of the assessee and since the ld. CIT (A) has followed the earlier orders of the Tribunal, we decline to interfere with the order of the ld. CIT(A). Software Expenses and Depreciation claim of software: 7. The assessee incurred an expenditure of ₹ 35.59 Crores on account of software, content and web hosting. The AO disallowed an amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 522,362 Merger Expenses, capital expenses 31/03/2014 S.B.G. CO VALUATION AND SHARE SWAP RATIO_MERGER WITH TBSL PR 600,000 Merger Expenses, capital expenses 31/03/2014 ERNST YOUNG LLP FINANCE PROVISION 2012- 13_VARIOUS SERVICES 621,825 Prior period expenses 31/03/2014 DIPTI TANDON CONSULTATION FEE FOR SPECIFIC PROJECT 550,000 capital expenses Total 2,414,940 Le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been suo moto disallowed by the assessee. 11. On going through the entire facts, the ld. CIT (A) held that an amount of ₹ 6,00,000/- spent towards valuation of shares for the purpose of merger of the company and ₹ 5,50,000/- paid to independent consultant are in the nature of capital expenditure. 12. Since, the ld. CIT (A) has gone through the details of expenditure and since the assessee has already disallowed an amount of ₹ 21,39,865/-, we hereby hold that the grounds of appeal of the revenue on this issue cannot be sustained. ITA No. 2210/Del/2018 A.Y. 2014-15 : (Assessee) 13. With regard to the amount of ₹ 6,00,000/- confirmed by the ld. CIT (A), the ld. AR relied on the judgment in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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