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TMI Blog2008 (9) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... he Judgment of the court was delivered by BADAR DURREZ AHMED, J - This appeal is directed against the order dated 23.02.2007 passed by the Income Tax Appellate Tribunal in respect of the assessment year 2001-02. 2. The only issue which arose for consideration before the Tribunal was whether the amount of Rs 20,23,317/- incurred by the assessee on development of its website was an expenditure of a capital nature or of a revenue nature. The assessee is engaged in the travel business and makes all kinds of arrangements for its clients such as booking of hotel rooms, providing taxi services, booking of air tickets and railway tickets etc. In its website, the assessee indicates the various destinations and places for which it can arrang ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pending money for its website, the assessee could not be considered to have acquired any capital asset even if such a website provided an enduring benefit to the assessee. Consequently, the Tribunal took the view that the expenditure for the acquisition and upgradation of the website was of a revenue nature. 4. The Tribunal placed reliance on two decisions of the Supreme Court in the cases of Empire Jute Company Ltd v. CIT: 124 ITR 01 and Alembic Chemical Works Company Ltd v. CIT: 177 ITR 377. 5. In Empire Jute Company Ltd (supra), the Supreme Court observed that if the advantage consists merely in facilitating the assessee's trading operations or enabling the management and conduct of the assessee's business to be carri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 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. The same could very well have been achieved and, indeed, in the past, it was achieved by printing travel brochures and other published materials and pamphlets. The advance of technology and the wide spread use of the internet has provided a very powerful medium to companies to publicize their activities to a larger spectrum of people at a much lower cost. Websites enable companies to do what the printed brochures did but, in a much more efficient manner as well as i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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