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2013 (9) TMI 331 - AT - Income TaxRevision u/s 263 - Nature of Expenditure – Capital Expenditure OR not - web site development expenses - order u/s 263 was passed setting aside the order under Section 143(3) of the Income Tax - Held that:- In view of the nature of expenses, we have no hesitation to come to a conclusion that the expenditure in question is in the revenue field – Following CIT vs. Indian Visit.Com Pvt.Ltd. [2008 (9) TMI 8 - DELHI HIGH COURT] - Expenditure on development of web site with a view to disseminate information about assessee’s business activities amongst its clients is revenue expenditure even though resulting in enduring benefit. - Decided in favor of assessee. Assessee was capitalizing the expenditure in the earlier years - Held that:- Applying project completion method does not mean that the expenditure which is not claimed in the current year, becomes a capital expenditure. In fact project completion method comes into play only when the expenditure is in the revenue field. Otherwise, it would have been called “capital work-in-progress.” The difference between project completion method and percentage completion method is the year of allowability of expenditure and the year of booking of income. - Decided in favor of assessee. Revision u/s 263 is not correct - CIT is wrong to direct the AO to treat the entire expenditure of Rs.9,49,039/- as capital in nature and disallow the same.
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