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TMI Blog2015 (12) TMI 455X X X X Extracts X X X X X X X X Extracts X X X X ..... he impugned issue is covered by the decision from Hon'ble Delhi High Court in the case of CIT vs Indian Visit.com Pvt. Ltd. (2008-TIOL-448-HC-DELIT)( 2008) 219 CTR 603 (Del.) and DCIT vs M/s Mahindra Reality and INF Developers Ltd. in ITA No.1160/Mum/2010, order dated 28/01/2011. This factual matrix was not controverted by the ld. DR. 2.1. We have considered the rival submissions and perused the material available on record. In view of the above, we are reproducing hereunder the relevant portion from the aforesaid order dated 28/01/2011 (ITA No.1160/Mum/2010) for ready reference:- "This appeal by the Revenue is against the order of the CIT(A)-V, Mumbai dated 07.12.2009. 2. Revenue has raised the following grounds: - "1. The order of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... existing business more profitably without altering the business structure of the company. The acquisition of software did not result in any advantage of enduring nature and it had not acquired the absolute ownership of the software but only the right to use the software. The A.O. did not accept the contention and treated the expenditure as capital expenditure and allowed depreciation @ 25%. Before the CIT(A) it was submitted that the assessee has purchased licenses of two software, i.e. MS Office and Marketing Data Management System, the life span of which is very short due to fast technological obsolesces. Therefore, the expenditure is of revenue nature. He relied on the decision of the Special Bench in the case of Amway Enterprises 111IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any reason to interfere with the findings of the CIT(A). Considering the nature of licences purchased by the assessee, being software of MS Office and Marketing Data Management System which facilitated the operations of the company and has no enduring benefit, the expenditure can only be considered as revenue in nature. The Hon'ble Special Bench of ITAT in the case of Amway Enterprises 111 ITD 112 (Del) (SB) inter alia held that for ascertaining as to whether the expenditure on computer software gives an enduring benefit to an assessee, the duration of time for which the assessee acquires right to use the software becomes relevant. Having regard to the fact that software becomes obsolete with technological innovation and advancement an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the AO. Expenditure incurred on website development is although enduring in nature, the intent and purposes behind the development is not to create an asset but only to provide a means for disseminating the information about the assessee among its clients. In the case of CIT vs. Indian Visit.com P. Ltd. (2008) 219 CTR 603 (Del), on identical facts, such expenditure was held to be revenue expenditure akin to printing of pamphlets etc. It was stated that mere enduring benefit, de hors any accretion to fixed capital would not make an expenditure a capital one. In the light of such facts and the legal position emerging from the cited decision, such expenditure is held to be revenue in nature and the addition made is deleted. The AO is, howev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... large set of people worldwide. The Tribunal has correctly appreciated the facts as well as the law on the subject and has come to the conclusion that the expenditure on the website was of a revenue nature and not of a capital nature. No substantial question of law arises for consideration." Respectfully following the above decision we uphold the decision of the CIT(A). The expenditure is correctly allowed as revenue expenditure. Ground is rejected. 8. In the result, appeal of the Revenue is dismissed." 2.2. If the observation made in the assessment order, leading to addition made to the total income, conclusion drawn in the impugned order, material available on record, assertions made by the ld. respective counsel and the aforesaid or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al has correctly appreciated the facts as well as the law on the subject and has come to the conclusion that the expenditure on the website was of a revenue nature and not of a capital nature. No substantial question of law arises for consideration." 2.3. Respectfully, following the decision from Hon'ble Delhi High Court and also of the Coordinate Bench, holding that just because a particular expenditure may result in an enduring benefit would not make such an expenditure of capital nature and real intent and purpose of the expenditure has to be seen, thus, we find no infirmity in the conclusion drawn by the ld. Commissioner of Income Tax (Appeals). 2.4. So far as ground no.2 with respect to deleting the disallowance of Rs. 11,07,00,000/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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