TMI Blog2010 (10) TMI 651X X X X Extracts X X X X X X X X Extracts X X X X ..... ot assessed as business income of the assessee and deposits in question were not treated as asset of financing business of the assessee - Decided in favour of assessee. Bad Debts written off - Advance given for purchase of shares for trading purposes - Since, assessee purchased shares of the company in question in earlier year and shown the same as investment in contradistinction to trading shares - In absence of any material brought on record by the assessee we find no error in the finding of the lower authorities to the effect that advance was given to M/s. Ficon Lease and Finance Ltd., for not purchasing shares for trading - Thus, decided against the assessee. Interest charged u/s. 234B - At the time of the hearing the Learned Authorised Representative of the assessee did not make any submission on this ground of appeal - Therefore, it is dismissed for want of prosecution. - ITA No. 3060/Ahd/2004 - - - Dated:- 29-10-2010 - Bhavnesh Saini, N.S. Saini, JJ. P.D. Shah for the Appellant R.K. Dhanesta, DR, for the Respondent ORDER N.S. Saini: This is an appeal filed by assessee against the order of the Learned C.I.T.(A)-VIII, Ahmedabad dated 10-8-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t benefit from the websites may accrue to the assessee over the lift of the product. Accordingly, it was contended that expenses incurred on creation of websites should be treated as revenue expenditure and allow deduction. In the alternative, it was also argued that since portal development expenses were capitalized depreciation should be allowed on the same. The Learned Commissioner of Income Tax (Appeals) after considering the submissions of the assessee held that the internet commerce companies sell their products and services on internet through their websites. E-commerce transactions for all the ingredients of traditional business transactions. He held that website is basically a domain place on the internet for which a party can display its goods and services along with other information. The prospective buyers can visit the website and place their orders. In other words website acts as a shop or showroom in which goods can be displayed and people can visit them. The expenses incurred in creation of website would therefore be in the nature of expenses incurred for the construction of a shop or showroom. The showroom gives enduring benefit to the party and expenses incurred i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not allow deduction for the expenditure by holding it to be a capital expenditure. In appeal, the CIT (A) confirmed the action of the Assessing Officer. 7. Before us the assessee relied upon the decision of Hon'ble Delhi High Court in the case of CIT vs. Indian Visit.Com (P) Ltd. (2009) 176 Taxman 164 wherein it has been held that expenditure on development of website with a view to disseminating the information about assessee's business activities amongst its clients is revenue expenditure even though resulting in enduring benefit. The Departmental Representative could not cite any contrary decision before us. We find that in the instant case, it is not in dispute that the expenditure in question was incurred for developing of website for disseminating information like advertisement expenses. Though the expenditure in question may yield enduring benefit to the assessee but no new capital asset was acquired by the assessee. Thus, in our considered opinion the above cited decision of the Hon'ble Delhi High Court in the case of Indian Visit.Com Pvt. Ltd., (supra) is squarely applicable to the facts of the instant case. We therefore, respectfully following the same set aside the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... course of business of banking or money lending. Therefore, the assessee company was not covered by exclusion of clause 36(2) and consequently the deduction for the bad debt was not allowable. Regarding the sum of Rs.3,40,000/- in question the CIT(A) observed that the amount was never offered for taxation in any earlier previous year. The assessee company was not a Banking Company or a Money Lending Company and the exclusion of clause of section 36(2) was not applicable to it. Moreover, the amount was given as advance for purchase of shares for trading purpose and therefore, it cannot be treated as money given in the normal course of Banking or money lending and therefore, the Assessing Officer was justified in disallowing the bad debt. 11. The Authorised Representative relied upon the decision of Hon'ble Supreme Court in the case of C.I.T. vs. Gillanders Arbuthnot and Co., 138 ITR- 763 (Cal.) where it was held that loss incurred on account of irrecoverable loan given to subsidiary company in the usual course of the business as a trading loss. He also relied upon the decision of Rajasthan High Court in the case of CIT vs. Anjani Kumar Co. Ltd., 259 ITR 114 (Raj.) where it was he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g business in which the assessee was engaged could not be controverted by the Revenue. No material was brought on record by the Revenue to show that interest income earned on deposits in earlier years were not assessed as business income of the assessee and deposits in question were not treated as asset of financing business of the assessee. In the above circumstances, in our considered opinion the lower authorities were not justified in disallowing the claim of bad debts of Rs.14,48,460/-. 17. In respect of advance of Rs.3,40,000/- given to Ficon Lease and Finance Ltd., the Learned Assessing Officer observed that the assessee has substantial interest in the said company i.e. Ficon Lease and Finacnce Ltd. The assessee is holding 2,26,200 equity shares of Rs.10 each fully paid up of the said company as reflected in Schedule-VI of the Balance Sheet of assessment year 2001-02. These shares are held as investment. In this background, the advance given by the assessee to the said company is not for the purpose of purchase of shares for trading. No material was brought on record by the assessee to show that the advance was given for purchase of shares for trading purposes by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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