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TMI Blog2015 (2) TMI 498X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 1,01,54,665/-incurred towards obtaining research report as 'capital' in nature as against revenue expenditure claimed by the appellant. 2. That the Commissioner of Income Tax (Appeals) failed to appreciate that the expenditure incurred by the appellant was towards obtaining research report in order to facilitate business operations and not for acquisition of any capital asset, much less an intangible asset. 3. That the Commissioner of Income-tax (Appeals) erred on facts and in law in affirming the net disallowance of expenditure amounting to Rs. 88,85,332/- (net of depreciation on Rs. 1,01,54,665/-, on the alleged ground that incurrence of such expenditure had resulted in benefit of an 'enduring nature' to the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see is in appeal before us. 6. The ld AR Shri Rohit Jain contended that the assessee is a private limited company incorporated on 16th April, 2003. It's business is to provide business advisory and related knowledge based service, to diverse sectors across globe; and since the assessee company lacked the adequate resources to prepare technical research reports for further selling to its customers, the assessee therefore contacted Zensar Technologies Ltd which was an established entity in the industry for providing various reports on the topics identified and required by the assessee, so that the reports can be later sold. The assessee company obtained reports on certain specific topics for further selling and distribution to its customers. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 09 1,759,143 217,430 1,976,573 January 09 1891361 10/03/2009 2,083,741 257,550 2,341,291 February 09 1900048 28/04/2009 1,888,658 227,602 2,116,260 March 09 1900049 28/04/2009 1,749,570 180,206 1,929,776 9,074,887 1,079,779 10,154,666 8. The ld AR pointed out that a perusal of the above chart would demonstrate and justify that such report were actually used during the year itself. And it was contended that during the year the sale aggregating to Rs. 1,06,47,974/- exceeded the total paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here is very little likelihood of any other client seeking a report on the same company. Such reports even if be stored in library would not render any benefit to the assessee company as they would not hardly be referred to in future. The ld AR pointed out that during the Financial Year 2008-09, which is relevant to the Assessment Year under consideration. Overall 81 reports were purchased from Zensar during the FY 2008-09 out of which 13 reports were used purely for marketing purposes by the Research Division. These reports were sent to various potential clients including AICazar Capital Limited, Doha Bank, Qatar Islamic Bank, Commercial Bank Tatweer, Shuaa Capital First Gulf Bank, Emirate NBD etc. And the remaining 68 reports were used by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of capital in nature, so it was rightly held by the AO and ld CIT(A) and therefore the impugned order need not be interfered by us. 11. We have heard both the parties and perused the records. In the instant case we find that the assessee is engaged in the business advisory services. In the course of the said business it has incurred expenditure of Rs. 1,01,54,665/- for obtaining research report. According to the AO, huge expenditure on acquiring research reports were incurred and the same is held to be an expenditure of capital nature on acquisition of intangibles assets. And since the expenditure has been treated as capital expenditure, depreciation at the rate prescribed for the tangible assets is allowed. Total expenditure incurred, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacture of special alloy and billets was an expansion of the assessee's business and not a new business and allowed deductions of expenditure. The decision of the Tribunal was affirmed by the High Court holding that all the assessee's bid was to start manufacturing a new commodity. In the larger sense, the business of the assessee remained the same, viz. the business of manufacture. The assessee was already manufacturing diverse items and a new item was added to this business. The Tribunal had found that there was complete unity of control and that there was a common fund which was most material for testing whether the business was the same. In considering whether the two businesses run by an assessee arc the same business, what i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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