TMI Blog2016 (2) TMI 518X X X X Extracts X X X X X X X X Extracts X X X X ..... vocate For The Respondent : Mr. Sachin Bhardwaj, Advocate Ajay Kumar Mittal,J. 1. This appeal has been preferred by the appellant-revenue under Section 260A of the Income Tax Act, 1961 (in short, the Act ) against the order dated 4.2.2015, Annexure A.III passed by the Income Tax Appellate Tribunal, Delhi Bench 'F' New Delhi (in short, the Tribunal ) in ITA No.5223/DEL/2014 for the assessment year 2009-10, claiming following substantial questions of law:- 1. Whether in the facts and circumstances of the case, the ITAT was correct in granting the relief of ₹ 88,85,332/- by treating the expenditure incurred on procurement of research reports as revenue in nature? 2. Whether in the facts and circumstances o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of extension of its business. It was also held that the expenditure had been incurred with a view to bring into existence an intangible asset in the form of research reports about the market which will result in advantage of enduring nature for the benefit of the business of the assessee in subsequent years. Aggrieved by the order, the assessee filed appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. Vide order dated 21.7.2014, Annexure A.II, the CIT(A) upheld the addition made by the Assessing Officer. Still not satisfied, the assessee filed appeal before the Tribunal. Vide order dated 4.2.2015, Annexure A.III, the Tribunal allowed the appeal relying upon the decision of the Delhi High Court in CIT vs. Priya Road Show Limi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... financial feasibility is revenue expenditure even if the assessee drops the said project. After considering the overall facts and circumstances of the case, the Tribunal held that the expenditure was for expansion of business and therefore such expenditure on research reports obtained in the course of advisory services was revenue expenditure. The mere fact that part of the expenditure was incurred for marketing did not change the nature of expenditure. Consequently the appeal was allowed. The relevant findings recorded by the Tribunal read thus:- 14. The Hon'ble Delhi High Court in the case of CIT vs. Priya Road Show Limited held that expenditure incurred for carrying out technical and financial feasibility is revenue expenditure, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat 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 are the same business, what is important is that unity of control and interlacing of the two businesses and not the nature of the business. A harmonious reading of the aforesaid two judgments of this Court namely Triveni Engineering Works Limited, (1998) 232 ITR 639 on the one hand and Modi Industries Limited (No.3) (1993) 200 ITR 341, on the other would clearly demonstrate that one has to keep in mind the essential purpose for which such an expenditure is incurred. If the expenditure is incurred for starting a new business which was not carried out by the assessee earlier, then s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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