D.C.I.T. Cir - 10,Kol, Kolkata V. M/S Singha Singh Roy & Associates Pvt Ltd., Kolkata

ITA 1747/KOL/2012

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3364 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2016
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 29-11-2012
• Court: TRIBUNAL
• Department Lawyers: R K KUREEL JCIT LD
• Keywords: Business expenditure; Wholly owned subsidiary; Commercial expediency; Revenue expenditure
• Section: 143(3)

Judgement Text

ITA NO.1747/KOL/2012-C-AM M/S. SINGHA SINGH ROY & ASSOCIATES P.LTD 1 IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH, K OLKATA BEFORE : SHRI MAHAVIR SINGH,JUDICIAL MEMBER, AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER I.T.A NO. 1747/KOL/2012 A.Y : 2007-08 D.C.I.T, CIR-10, KOLKATA VS. M/S. SINGHA SINGH ROY & ASSOCI ATES PVT. LTD PAN: AADCS 6826L (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI R.K KUREEL, JCIT, LD.SR.DR FOR THE RESPONDENT: SHRI PRASUN KUMAR BHATTACHARYA, ADVOCATE, LD.AR DATE OF HEARING: 17-12-2015 DATE OF PRONOUNCEMENT: 20 -01- 2016 ORDER SHRI M.BALAGANESH, AM THIS APPEAL OF THE REVENUE ARISES OUT OF THE OR DER OF THE LEARNED CIT(A), XII, KOLKATA IN APPEAL NO. 969/XII/CIR-10/09-10 DATED 08-08-2012 FOR THE ASSESSMENT YEAR 2007-08 AGAINST THE ORDER OF ASSESSMENT FRAME D BY THE LEARNED AO U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO A S THE ACT). 2. THE FIRST ISSUE TO BE DECIDED IN THIS APP EAL IS AS TO WHETHER THE LEARNED CIT(A) IS JUSTIFIED IN ALLOWING THE INTEREST PAID ON LOANS UTILIZED FOR ADVANCING TO SISTER CONCERN ON THE GROUND OF COMMERCIAL EXPEDIENCY AMOU NTING TO RS. 99,99,780/-. 2.1. THE BRIEF FACTS OF THIS ISSUE IS THAT THE AS SESSEE IS ENGAGED IN THE BUSINESS OF INFORMATION TECHNOLOGY TRAINING BUSINESS, IT ENABLE D SERVICES AND CONTACT CENTRE BUSINESS INCLUDING HEALTH CARE BPO ACTIVITIES AND S OFTWARE DEVELOPMENT. THE ASSESSEE HAD EFFECTED ACQUISITION OF TRANSCRIPTION SOUTH, INC. (TSI) AS 100% SUBSIDIARY COMPANY BASED IN UNITED STATES OF AMERIC A. TSI IS ALSO ENGAGED IN IT AND ITA NO.1747/KOL/2012-C-AM M/S. SINGHA SINGH ROY & ASSOCIATES P.LTD 2 IT ENABLED SERVICES INCLUDING CONTACT CENTER, HEALT HCARE BPO ACTIVITIES AND SOFTWARE DEVELOPMENT. THE ASSESSEE EXPLAINED THAT THE MAIN OBJECTIVE OF THIS ACQUISITION WAS TO EXPAND AND CONSOLIDATE THE CLIENT BASE OF THE ASESS SEE IN USA AND TO ENCAHS ON THE ADVANTAGES OF OUTSOURCING THROUGH SAVING OF COST AN D THE BENEFITS OF SYNERGY. THE ASSESSEE STATED THAT TSI HAS GRADUALLY BEEN DEVELO PED AS THE MARKETING HUB OF THE ASSESSEE. THE ASSESSEE ALSO STATD THAT THE ERSTWHI LE GM OPERATIONS OF ASSESSEE AT INDIA HAS BEEN PERMANENTLY POSTED AT TSI OFFICE AS ITS CH IEF OPERATING OFFICER (COO) WHO ALSO LOOKS AFTER THE OPERATIONS AND MARKETING INITI ATIVES OF THE GROUP. THE ASSESEES SENIOR MANAGER MARKETING IS ALSO PLACED AT TSI OF FICE ON L1 VISA AS THE COUNTRY HEAD USA TO LOOK AFTER BUSINESS DEVELOPMENT FOR T HE GROUP. THIS MARKETING INITIATIVE OF TSI HAS HELPED THE ASSESSEE TO BAG MA NY NEW PROJECTS. INCIDENTALLY, THIS APART, THE ASSESSEE HAS A CO-LOCATION IN USA AND TH E CONTACT CENTER IN NAVI MUMBAI AND THE CO-LOCATION IS CONNECTED THROUGH A 2 MBPS I PLC CIRCUIT FOR VOICE AND DATA TRANSFER REQUIRED FOR FUNCTIONING OF THE CONTACT CE NTER. THIS CO-LOCATION IS ALSO MAINTAINED WITH THE HELP OF TECHNICAL SUPPORT FROM TSI. TSI ACTS AS A REPRESENTATIVE OFFICE OF THE ASSESSEE IN USA PROVIDING MARKETING, TECHNICAL AND OTHER SUPPORT AS REQUIRED FROM TIME TO TIME. THE ASSESSEE HAD INVE STED RS. 320.58 LACS FOR ACQUIRING TSI DURING THE YEAR UNDER APPEAL. IN TERMS OF REQU IREMENT OF ITS SUBSIDIARY, THE ASSESSEE HAD DURING THE ASST YEAR UNDER APPEAL, ADV ANCED INTEREST FREE LOAN OF RS. 344.14 LACS TO TSI. THE ASSESSEE HAD AVAILED BANK LOANS AND THE SAME HAD INCREASED BY RS. 343.64 LACS DURING THE YEAR UNDER APPEAL WHI LE NON-INTEREST BEARING UNSECURED LOANS FROM ITS SHAREHOLDERS AND DIRECTORS HAD INCRE ASED BY RS. 219.59 LACS. THE ASSESSEE PAID INTEREST TO BANKS AMOUNTING TO RS. 1, 50,63,000/- AND THE LEARNED AO SOUGHT TO DISALLOW RS. 99,99,780/- BY APPLYING AVER AGE RATE OF 10.38% ON THE INVESTMENTS MADE IN SUBSIDIARY COMPANY. 2.2. ON FIRST APPEAL, THE LEARNED CITA FOUND THAT THE ASSESSEE HAD EARNED SUBSTANTIAL INCOME FROM ITS WHOLLY OWNED SUBSIDIARY COMPANIES I N THE SUBSEQUENT YEARS AND ACCORDINGLY THE ASSESSEE JUSTIFIED THE COMMERCIAL E XPEDIENCY OF ADVANCING THE MONIES ITA NO.1747/KOL/2012-C-AM M/S. SINGHA SINGH ROY & ASSOCIATES P.LTD 3 TO ITS WHOLLY OWNED SUBSIDIARY COMPANY. THE LEARN ED CITA PLACED RELIANCE ON THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF S.A.BUILDERS LTD VS CIT REPORTED IN 288 ITR 1 (SC) AND DELETED THE DISALLOWANCE OF INTEREST. AGGRIEV ED, THE REVENUE IS IN APPEAL BEFORE US ON THE FOLLOWING GRO UND:- 1. WHETHER LD.CIT(A)-XII, KOLKATA WAS JUSTIFIED IN DECIDING THE ISSUE OF COMMERCIAL EXPEDIENCY OF LOAN GIVEN TO SIS TER CONCERN WITHOUT GIVING REASON IN HIS ORDER? 2.3. THE LEARNED DR ARGUED THAT THE SUBSIDIARY COM PANY IS IN FOREIGN LOCATION WHICH IS ACCESSIBLE TO EASY LOANS AT CHEAP COST. WHILE T HIS IS SO, WHY SHOULD THE ASSESSEE HEREIN PAYING HUGE INTEREST IN INDIA TO BANKS SHOUL D DIVERT ITS FUNDS TO ITS SUBSIDIARY COMPANY. THE BUSINESS EXPEDIENCY HEREIN IS NOT UND ERSTANDABLE. IN RESPONSE TO THIS, THE LEARNED AR ARGUED THAT THE INVESTMENTS AND ADVA NCES TO SUBSIDIARY COMPANY ARE STRATEGIC INVESTMENTS AND COMMERCIAL EXPEDIENCY IS PROVED BEYOND DOUBT. HE FURTHER ARGUED THAT THE MEMORANDUM OF ASSOCIATION ALLOWS TH E ASSESSEE TO DO INVESTMENT ACTIVITY AND ARGUED THAT THROUGH THE SUBSIDIARY COM PANY, THE HUGE BUSINESSES WERE OBTAINED BY THE ASSESSEE AND ALSO RELIED ON THE CO- ORDINATE BENCH DECISION OF THIS TRIBUNAL IN THE CASE OF EIH LTD VS CIT IN ITA NO. 316 / KOL / 2006 DATED 11 .9.2015 IN SUPPORT OF HIS CONTENTIONS. 2.4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE MATERIALS AVAILABLE ON RECORD INCLUDING THE PAPER BOOK FILED BY THE ASSESS EE. THE FACTS STATED HEREINABOVE REMAIN UNDISPUTED ARE NOT REITERATED FOR THE SAKE O F BREVITY. WE FIND THAT THE LEARNED AO HAD DISALLOWED THE INTEREST PAYMENTS TO BANKS ON LY ON THE SOLE GROUND THAT INTEREST FREE FUNDS WERE ADVANCED TO SUBSIDIARY COMPANY BY T HE ASSESSEE. HE HAD NOT BROUGHT ON RECORD THE NEXUS BETWEEN THE BORROWED FUNDS AND THE AMOUNTS ADVANCED TO SUBSIDIARY COMPANY WHICH IS ONE OF THE MAIN PRE-REQ UISITE BEFORE RESORTING TO DISALLOWANCE OF INTEREST. WE ALSO FIND FROM THE FA CTS THAT THE ASSESSEE IS HAVING BOTH INTEREST BEARING AND INTEREST FREE FUNDS AT ITS DIS POSAL AND HAD ADVANCED THE MONIES TO SUBSIDIARY COMPANY FROM THE BANK ACCOUNT WHERE OWN AND BORROWED FUNDS ARE ITA NO.1747/KOL/2012-C-AM M/S. SINGHA SINGH ROY & ASSOCIATES P.LTD 4 INEXTRICABLY MIXED. WE ALSO FIND THAT THE ADVANCES MADE TO WHOLLY OWNED SUBSIDIARY COMPANY THROUGH WHICH HUGE BUSINESSES WERE OBTAINED BY THE ASSESSEE IN SUBSEQUENT YEARS CANNOT BE SWEPT UNDER THE CARPET AS THEY REMA IN UNDISPUTED. WE ALSO FIND THAT THE ASSESSEE HAD DEPUTED ITS EMPLOYEES IN TSI WHO A RE WORKING AS CHIEF OPERATING OFFICER AND SENIOR MANAGER MARKETING TO TAKE CARE O F THE NEW BUSINESS OPPORTUNITIES AND DEVELOP THE BUSINESS. THESE EFFORTS HAVE YIELD ED FRUITS TO THE ASSESSEE IN THE FORM OF NEW BUSINESSES AND EXPANDED GLOBAL PRESENCE IN U SA. THIS ITSELF GOES TO PROVE THAT THE BUSINESS INTERESTS OF THE ASSESSEE BEYOND DOUBT. WITH REGARD TO THE ARGUMENTS OF THE LEARNED DR THAT THE SUBSIDIARY COMPANY IS AC CESSIBLE TO CHEAP COST OF FUNDING IN USA IS OF NO RELEVANCE AS IT IS WELL SETTLED THA T ONCE IT IS ESTABLISHED THAT THERE IS NEXUS BETWEEN EXPENDITURE AND PURPOSE OF BUSINESS, REVENUE CANNOT JUSTIFIABLY CLAIM TO PUT ITSELF IN ARM-CHAIR OF BUSINESSMAN OR IN POS ITION OF BOARD OF DIRECTORS AND ASSUME ROLE TO DECIDE HOW MUCH IS REASONABLE EXPEND ITURE HAVING REGARD TO CIRCUMSTANCES OF CASE. 2.4.1. WE ALSO FIND THAT THE ISSUE BEFORE US IS SQ UARELY COVERED BY THE RECENT DECISION OF THE HONBLE APEX COURT IN THE CASE OF HERO CYCLES (P) LTD VS CIT REPORTED IN (2015) 63 TAXMANN.COM 308 (SC) VIDE ORDER DATED 5.1 1.2015, IT WAS HELD : 12. IN SO FAR AS LOANS TO THE SISTER CONCERN/SUBSIDIAR Y COMPANY ARE CONCERNED, LAW IN THIS BEHALF IS RECAPITULATED BY THIS COURT I N THE CASE OF S.A. BUILDERS LTD. V. CIT REPORTED IN (2007) 288 ITR 1 (SC). AFT ER TAKING NOTE OF AND DISCUSSING ON THE SCOPE OF COMMERCIAL EXPEDIENCY, T HE COURT SUMMED UP THE LEGAL POSITION IN THE FOLLOWING MANNER: '26. THE EXPRESSION 'COMMERCIAL EXPEDIENCY' IS AN E XPRESSION OF WIDE IMPORT AND INCLUDES SUCH EXPENDITURE AS A PRUD ENT BUSINESSMAN INCURS FOR THE PURPOSE OF BUSINESS. THE EXPENDITURE MAY NOT HAVE BEEN INCURRED UNDER ANY LEGAL OBLIGATI ON, BUT YET IT IS ALLOWABLE AS A BUSINESS EXPENDITURE IF IT WAS INCUR RED ON GROUNDS OF COMMERCIAL EXPEDIENCY. 27. NO DOUBT, AS HELD IN MADHAV PRASAD JATIA V. CIT [1979 (118) ITR 200 (SC) ], IF THE BORROWED AMOUNT WAS DONATED FOR SOME ITA NO.1747/KOL/2012-C-AM M/S. SINGHA SINGH ROY & ASSOCIATES P.LTD 5 SENTIMENTAL OR PERSONAL REASONS AND NOT ON THE GROU ND OF COMMERCIAL EXPEDIENCY, THE INTEREST THEREON COULD N OT HAVE BEEN ALLOWED UNDER SECTION 36(1)(III) OF THE ACT. IN MAD HAV PRASAD'S CASE [ 1979 (118) ITR 200 (SC) ], THE BORROWED AMOUNT WAS DONATED TO A COLLEGE WITH A VIEW TO COMMEMORATE THE MEMORY OF TH E ASSESSEE'S DECEASED HUSBAND AFTER WHOM THE COLLEGE WAS TO BE N AMED, IT WAS HELD BY THIS COURT THAT THE INTEREST ON THE BORROWE D FUND IN SUCH A CASE COULD NOT BE ALLOWED, AS IT COULD NOT BE SAID THAT IT WAS FOR COMMERCIAL EXPEDIENCY. 28. THUS, THE RATIO OF MADHAV PRASAD JATIA'S CASE [ 1979 (118) ITR 200 (SC) ] IS THAT THE BORROWED FUND ADVANCED TO A THIRD PAR TY SHOULD BE FOR COMMERCIAL EXPEDIENCY IF IT IS SOUGHT TO BE ALLOWED UNDER SECTION 36(1)(III) OF THE ACT. 29. IN THE PRESENT CASE, NEITHER THE HIGH COURT NOR THE TRIBUNAL NOR OTHER AUTHORITIES HAVE EXAMINED WHETHER THE AMOUNT ADVANCED TO THE SISTER CONCERN WAS BY WAY OF COMMERCIAL EXPEDIENCY. 30. IT HAS BEEN REPEATEDLY HELD BY THIS COURT THAT THE EXPRESSION 'FOR THE PURPOSE OF BUSINESS' IS WIDER IN SCOPE THAN THE EXPRESSION 'FOR THE PURPOSE OF EARNING PROFITS' VIDE CIT V. MALAYAL AM PLANTATIONS LTD. [ 1964 53 ITR 140 (SC) , CIT V. BIRLA COTTON SPINNING AND WEAVING MILLS LTD. [ 1971 82 ITR 166 (SC) ], ETC.' 13. IN THE PROCESS, THE COURT ALSO AGREED THAT THE VIE W TAKEN BY THE DELHI HIGH COURT IN CIT V. DALMIA CEMENT (P.) LTD. [2002] 254 ITR 377/121 TAXMAN 706 WHEREIN THE HIGH COURT HAD HELD THAT ONCE IT IS ES TABLISHED THAT THERE IS NEXUS BETWEEN THE EXPENDITURE AND THE PURPOSE OF BUSINESS (WHICH NEED NOT NECESSARILY BE THE BUSINESS OF THE ASSESSEE ITSELF), THE REVENUE CANNOT JUSTIFIABLY CLAIM TO PUT ITSELF IN T HE ARM-CHAIR OF THE BUSINESSMAN OR IN THE POSITION OF THE BOARD OF DIRE CTORS AND ASSUME THE ROLE TO DECIDE HOW MUCH IS REASONABLE EXPENDITURE H AVING REGARD TO THE CIRCUMSTANCES OF THE CASE. IT FURTHER HELD THAT NO BUSINESSMAN CAN BE COMPELLED TO MAXIMIZE HIS PROFIT AND THAT THE INCOM E TAX AUTHORITIES MUST PUT THEMSELVES IN THE SHOES OF THE ASSESSEE AND SEE HOW A PRUDENT BUSINESSMAN WOULD ACT. THE AUTHORITIES MUST NOT LOO K AT THE MATTER FROM THEIR OWN VIEW POINT BUT THAT OF A PRUDENT BUSINESS MAN. 14. APPLYING THE AFORESAID RATIO TO THE FACTS OF THIS CASE AS ALREADY NOTED ABOVE, IT IS MANIFEST THAT THE ADVANCE TO M/S. HERO FIBRES LIMITED BECAME IMPERATIVE AS A BUSINESS EXPEDIENCY IN VIEW OF THE UNDERTAKING GIVEN TO THE FINANCIAL INSTITUTIONS BY THE ASSESSEE TO THE EFFEC T THAT IT WOULD PROVIDE ITA NO.1747/KOL/2012-C-AM M/S. SINGHA SINGH ROY & ASSOCIATES P.LTD 6 ADDITIONAL MARGIN TO M/S. HERO FIBRES LIMITED TO ME ET THE WORKING CAPITAL FOR MEETING ANY CASH LOSSES. 15. IT WOULD ALSO BE SIGNIFICANT TO MENTION AT THIS ST AGE THAT, SUBSEQUENTLY, THE ASSESSEE COMPANY HAD OFF-LOADED ITS SHARE HOLDI NG IN THE SAID M/S. HERO FIBRES LIMITED TO VARIOUS COMPANIES OF OSWAL G ROUP AND AT THAT TIME, THE ASSESSEE COMPANY NOT ONLY REFUNDED BACK T HE ENTIRE LOAN GIVEN TO M/S. HERO FIBRES LIMITED BY THE ASSESSEE BUT THIS W AS REFUNDED WITH INTEREST. IN THE YEAR IN WHICH THE AFORESAID INTERE ST WAS RECEIVED, SAME WAS SHOWN AS INCOME AND OFFERED FOR TAX. 16. IN SO FAR AS THE LOANS TO DIRECTORS ARE CONCERNED, IT COULD NOT BE DISPUTED BY THE REVENUE THAT THE ASSESSEE HAD A CRE DIT BALANCE IN THE BANK ACCOUNT WHEN THE SAID ADVANCE OF RS. 34 LAKHS WAS G IVEN. REMARKABLY, AS OBSERVED BY THE CIT (APPEAL) IN HIS ORDER, THE COMP ANY HAD RESERVE/SURPLUS TO THE TUNE OF ALMOST 15 CRORES AND , THEREFORE, THE ASSESSEE COMPANY COULD IN ANY CASE, UTILISE THOSE FUNDS FOR GIVING ADVANCE TO ITS DIRECTORS. 17. ON THE BASIS OF AFORESAID DISCUSSION, THE PRESENT APPEAL IS ALLOWED, THEREBY SETTING ASIDE THE ORDER OF THE HIGH COURT A ND RESTORING THAT OF THE INCOME TAX APPELLATE TRIBUNAL. IN VIEW OF THE AFORESAID FACTS AND CIRCUMSTANCES AN D THE JUDICIAL PRECEDENTS ON THE IMPUGNED ISSUE, WE HOLD THAT THE ADVANCES WERE MADE BY THE ASSESSEE TO ITS WHOLLY OWNED SUBSIDIARY COMPANY DURING THE COURSE OF ITS B USINESS AND IS A STRATEGIC INVESTMENT AND AS A MEASURE OF COMMERCIAL EXPEDIENC Y TO PROTECT ITS BUSINESS INTERESTS. ACCORDINGLY WE DONT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT(A). ACCORDINGLY, THE GROUND NO. 1 RAISED BY THE REVENUE IS DISMISSED. 3. THE LAST GROUND TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LEARNED CIT(A) IS JUSTIFIED IN ALLOWING THE DEFERRED REVENUE EXPENDIT URE OF RS. 76,000/- TOWARDS TECHNICAL INFORMATION REFERENCE MATERIAL (TIRM). 3.1. THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASS ESSEE HAD WRITTEN OFF IN ITS BOOKS A SUM OF RS. 76,000/- TOWARDS EXPENSES RELATING TO TIRM AND IN THIS REGARD HAD STATED IN ITS NOTES ON ACCOUNTS TO FINANCIAL STATEMENTS AS UNDER: - ITA NO.1747/KOL/2012-C-AM M/S. SINGHA SINGH ROY & ASSOCIATES P.LTD 7 DEFERRED REVENUE EXPENDITURE TIRM EXPENSE RELATING TO TECHNICAL INFORMATION RE FERENCE MATERIAL HAS BEEN CONSISTENTLY TREATED AS DEFERRED REVENUE EXPEN DITURE ON THE BASIS OF THE TENURE OF THE LICENSED AGREEMENT WITH NIIT. TH E LICENSE AGREEMENT WITH NIIT HAVING EXPIRED DURING THE YEAR WITH NO FU RTHER RENEWAL, THE BALANCE AMOUNT OF RS 76,000/- ON ACCOUNT OF TIRM LY ING AS DEFERRED REVENUE EXPENDITURE HAS FULLY BEEN CHARGED TO REVEN UE. THE SAID SUM WAS ALSO CLAIMED AS DEDUCTION IN THE R ETURN BY THE ASSESSEE. THE LEARNED AO TREATED THE SAME AS CAPITAL IN NATURE AN D DISALLOWED THE SAME WHICH WAS DELETED BY THE LEARNED CIT(A). AGGRIEVED, THE REVE NUE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUND:- 2. WHETHER THE DECISION LD. CIT(A)-XII, KOLKATA W. R.T GROUND 10 WAS NOT INCONSISTENT WITH THE DECISION OF CIT(A ) IN APPEAL NO. 291/XII/CIR-10/08-09 DATED 03-02-2012 (AY 2006-07) ? 3.2. THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDE R OF THE LEARNED AO. IN RESPONSE TO THIS, THE LEARNED AR STATED THAT THE SA ID EXPENDITURE HAS BEEN ALLOWED BY THE REVENUE IN THE FIRST TWO YEARS AND THE LICENSE IS FOR A PERIOD OF THREE YEARS WITH NIIT AND HENCE PRAYED FOR NON-INTERFERENCE IN THE O RDER OF THE LEARNED CIT(A). 3.3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERU SED THE MATERIALS AVAILABLE ON RECORD INCLUDING THE PAPER BOOK FILED BY THE ASSESS EE. THE FACTS STATED HEREINABOVE REMAIN UNDISPUTED ARE NOT REITERATED HEREIN FOR THE SAKE OF BREVITY. WE FIND THAT THIS ISSUE HAS BEEN ALLOWED BY THE REVENUE IN THE EARLIE R TWO ASSESSMENT YEARS WITH REGARD TO THE DEFERRED REVENUE EXPENDITURE INCURRED TOWARD S TIRM BASED ON LICENSE AGREEMENT ENTERED INTO BY THE ASSESSEE WITH NIIT AN D IN THE ASST YEAR UNDER APPEAL, THE SAID AGREEMENT HAVING EXPIRED, THE ASSESSEE CHOSE T O WRITE OFF THE UNABSORBED DEFERRED REVENUE EXPENDITURE IN ITS BOOKS. HENCE WE FIND TH AT THERE IS NO MISTAKE IN THE CLAIM OF THE ASSESSEE. ACCORDINGLY, THE GROUND NO.2 RAIS ED BY THE REVENUE IS DISMISSED. ITA NO.1747/KOL/2012-C-AM M/S. SINGHA SINGH ROY & ASSOCIATES P.LTD 8 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS D ISMISSED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON 20 -01 -2016 1. . THE APPELLANT: THE DCIT, CIR-10 P-7 CHOWRINGHEE SQ ., 3 RD FL, KOL-69. 2 THE RESPONDENT- M/S. SINGHA SINGH ROY & ASSOCIATES PVT. LTD 46/31/1 GARIAHAT ROAD, 3 RD FL., KOL-29. 3 / THE CIT, 4.THE CIT(A) 5 . DR, KOLKATA BENCH 6 . GUARD FILE . TRUE COPY, BY ORDER, ASSTT REGISTRAR **PRADIP SPS SD/- ( MAHAVIR SINGH, JUDICIAL MEMBER ) SD/- (M. BALAGANESH, ACCOUNTANT MEMBER) DATE 20/ 01/2016 COPY OF THE ORDER FORWARDED TO:-