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2015 (12) TMI 347 - ITAT DELHI

2015 (12) TMI 347 - ITAT DELHI - TMI - Disallowance of Licensing/registration fee & ISO registration fees - CIT(A) deleted the addition - revenue v/s capital in nature - Held that:- CIT(A) granted relief by holding that the AO could not understand the business activity of the assessee properly. He further observed that the assessee company was doing business of giving card to customers of different business entities and impugned expenditure incurred towards plant registration and licensing and r .....

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ve the same. - Decided against revenue - I.T.A .No.-6527/Del/2013 - Dated:- 28-8-2015 - SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI C.M. GARG, JUDICIAL MEMBER For The Appellant by Sh. Atiq Ahmad, Sr. DR For The Respondent by Sh. Prasant Khandelwal, CA ORDER PER C.M. GARG, J.M. This appeal by the Revenue has been preferred against the order of the CIT(A)-VIII, New Delhi dated 24.05.2013 in Appeal No. 539/2011-12 for A.Y. 2004-05. 2. The grounds raised by the Revenue read as under: 1. Whether on t .....

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ecord, inter-alia, assessment order, order of the CIT(A) and ratio of the judgments/orders relied by both the sides. The ld. DR submitted that the AO was correct in holding that the expenditure incurred on account of licensing/registration fee and ISO registration fees is in the nature of an expenditure which is of enduring benefit to the assessee. The ld. DR vehemently submitted that CIT(A) granted relief without any basis. Hence, impugned order may kindly be set aside by restoring that of the .....

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we note that the assessee submitted written contentions before CIT(A) challenging the conclusion of the AO which reads as follows: Written submission 1. That tax Audit report of the company is enclosed herewith. In continuance to our earlier reply we submit as under: 2. That development centres are backbone of Kedia Infotech Limited for servicing and promoting E-Tran Digicash holders members. These centre provide independent training and backup and delivering specific services to members all ove .....

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egistration is incurred every year and our case was also scrutinized during assessment year 2006-07 also and no addition was made during the year. Copy of assessment order and balance sheet is enclosed for your verification. That in our case we have incurred expenditure not for acquiring any right to operate services etc. but are the expenses paid to development centers providing localized Global E-Commerce Services to Card Holder and no new assets have been created of an enduring nature but exp .....

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the proceeding as well as succeeding years also as under: 31.03.2003 31.03.2004 31.03.2005 31.03.2006 10000/- 85000/- 21980/- 9367/- 6. From operating and concluding part of the impugned order of the first appellate authority we note that the relief was granted with following conclusion: My findings: I have perused the written submission, grounds of appeal and facts of the case, I discussed the matter with the AR very carefully. The AO cannot understand the business activity of the appellant pro .....

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ness entities. Therefore, its expenditure of ₹ 28,06,409/- is nothing but expenditure of plant registration and licensing and registration fee for different places all over India. These expenditures are allowed to the appellant company in other years except this year. Hence, considering the Rule of consistency and treating this as revenue expenditure for improving business of the companies themselves, it is nothing but revenue expenditure. The AO should enquire these facts at the assessmen .....

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