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2017 (4) TMI 163

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..... set but only to provide a means for disseminating the information about the assessee. - Decided against revenue - I. T. A. No. 1911/Kolkata/2014 - - - Dated:- 16-9-2016 - P. M. Jagtap (Accountant Member) For the Appellant : Sucheta Chattopadhyay, Departmental Representative For the Respondent : S. Singh, Fellow of Chartered Accountant ORDER 1. This appeal is preferred by the Revenue against the order of the learned Commissioner of Income-tax (Appeals)-XIX, Kolkata dated July 7, 2014 for the assessment year 2002-03 and in the solitary ground raised therein, the Revenue has challenged the action of the learned Commissioner of Income-tax (Appeals) in deleting the addition of ₹ 1,37,77,569 made by the Assessing Offic .....

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..... hem of and reimbursement of related costs towards developing the portals for allindia.com. Keeping in view the above, the Assessing Officer was of the view that the amount of ₹ 1,37,77,768 debited by the assessee to the profit and loss account, which constituted capital expenditure, was required to be added back to its total income and there was thus escapement of income of the assessee to that extent from the assessment. He, therefore, reopened the assessment by issuing notice under section 148 after recording the reasons and in the assessment completed under section 143(3)/147 vide an order dated August 3, 2009, the website development expenses of ₹ 1,37,77,769 were disallowed by him. 3. Against the order passed by the .....

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..... udgment of the apex court as well as by various High Courts. Reference in this regard was made to the following judgments : 1. Empire Jute Co. Ltd. v. CIT [1980] 124 ITR 1 (SC) 2. Alembic Chemical Works Co. Ltd. v. CIT [1989] 177 ITR 377 (SC) 3. CIT v. Indian Visit.com (P.) Ltd. [2009] 176 Taxman 164 (Delhi) 4.3. It may be mentioned that the Delhi High Court in the case of India Visit.com had referred to the pronouncement of the apex court in the above two referred cases at Sl. Nos. 1 and 2 wherein it was ruled with reference to Sl. No. 1 that the advantage consists merely in facilitating the assessee's trading operations or enabling the management and conduct of the assessee's business to be carried on more effi .....

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..... d, the expenditure could not have been viewed as capital expenditure because the website is put up for the purposes of day-to- day running of the business and even if one was to view that some enduring benefit is obtained by the assessee, the benefit cannot be said to accrue to the assessee in the capital field. A website is something where full information about the assessee's business is given and it helps the assessee's customers in dealing with it. A website constantly needs updating, otherwise it may become obsolete. It helps in the smooth and efficient running of the day-to-day business. Going by the entire matrix of facts and the rulings of both the apex court and the High Court as depicted above, I can only hold that we .....

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..... uring benefit was obtained by the assessee by way of development of website, such benefit could not be said to have accrued to the assessee in the capital field. At the time of hearing before me, the learned Departmental representative has not brought to my notice any decision, wherein a different view in favour of the Revenue has been taken on this issue. I, therefore, find no infirmity in the impugned order of the learned Commissioner of Income-tax (Appeals) in deleting the disallowance made by the Assessing Officer on account of website development expenses incurred by the assessee by following the decision of the hon'ble Supreme Court in the case of Alembic Chemical Works Co. Ltd. v. CIT [1989] 177 ITR 377 (SC) and that of the Tribu .....

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