Avtar Singh, Patiala V. JCIT, Patiala

ITA 392/CHANDI/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9822 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 08-08-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 19-04-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGHDR
• Keywords: Capital asset; Opportunity of being heard; Proportionate interest; Revenue expenditure; Capital expenditure
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 392/CHD/2016 ASSESSMENT YEAR: 2009-10 SHRI AVTAR SINGH, VS THE JCIT, PROP. CHANDIGARH COMPUTER CENTER, PATIALA RANGE, LEELA BHAWAN, PATIALA. PATIALA. PAN: ACIPS5232R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHOK GOYAL RESPONDENT BY : SHRI MANJIT SINGH,DR DATE OF HEARING : 12.07.2016 DATE OF PRONOUNCEMENT : 19.07.2016 O R D E R THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST T HE ORDER OF LD. CIT(APPEALS) MEERUT CAMP AT PATIALA DA TED 17.02.2016 FOR ASSESSMENT YEAR 2009-10. 2. I HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PAR TIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. 3. ON GROUND NO. 1, ASSESSEE CHALLENGED THE DISALLOWANCE OF RS. 10,56,163/- ON ACCOUNT OF ADVERTISEMENT EXPENDITURE ON THE BASIS THAT THE TDS WAS NOT DEDUCTED, WHICH ACTUALLY HAVE BEEN DEDUCTED. T HE ASSESSING OFFICER NOTED THAT ASSESSEE IN THE PROFIT & LOSS 2 ACCOUNT HAS DEBITED A SUM OF RS. 16,72,425/- UNDER THE HEAD ALL INDIA PTU EXPENSES. ON VERIFICATION OF THIS ACCOUNT, IT WAS NOTICED THAT A SUM OF RS. 10,56,169 /- INCLUDED IN THIS ACCOUNT IS THE ADVERTISEMENT EXPEN DITURE BUT NO TAX HAS BEEN DEDUCTED AT SOURCE BY THE ASSES SEE WHILE MAKING THE PAYMENT. THE ASSESSEE, IN RESPONS E TO THE QUERY RAISED BY ASSESSING OFFICER SUBMITTED THA T THE AFORESAID SUM AMOUNT IS THE SHARE OF NEWSPAPER ADVERTISEMENT BORNE BY ALL INDIA PTU DEPARTMENT ASSOCIATES AND TDS HAS BEEN DEDUCTED BY THEM AT THE IR LEVEL WHICH IS CONFIRMED FROM THE LETTER ISSUED BY ALL INDIA PTU-DEP ASSOCIATES, COPY WAS FILED. THE ASSESSING OFFICER, HOWEVER, DID NOT ACCEPT CONTENTION OF THE ASSESSEE BECAUSE AS PER PROVISIONS OF SECTION 194C, THE PERSON MAKIN G THE PAYMENT ON ACCOUNT OF ADVERTISEMENT SHALL AT THE TI ME OF CREDIT OF SUCH SUM TO THE ACCOUNT OF THE CONTRACTOR OR AT THE TIME OF PAYMENT THEREOF, SHALL DEDUCT THE TAX A T THE SOURCE @ 1% UNDER SECTION 194C OF THE INCOME TAX AC T. THE ASSESSING OFFICER DID NOT ACCEPT CONTENTION OF THE ASSESSEE THAT TDS HAS BEEN DEDUCTED BY ALL INDIA PT U ASSOCIATION AND ACCORDINGLY, DISALLOWED THE AMOUNT OF RS. 10,56,169/- FOR NON-DEDUCTION OF TDS. 4. THE ASSESSEE REITERATED THE SUBMISSIONS BEFORE L D. CIT(APPEALS). IT WAS SUBMITTED THAT THERE ARE SEVE N PARTIES IN PUNJAB DOING SIMILAR TYPE OF BUSINESS. THE SAID PARTIES FORMED AN ASSOCIATION IN THE NAME OF PTU-DEP ASSOCI ATES. IT DEALS WITH THE COMMON MATTERS INCLUDING INTER-AL IA MAKING OF ARRANGEMENT OF ADVERTISEMENT AND INCURRIN G 3 EXPENDITURE THEREON. IN ORDER TO MINIMIZE THE EXPE NSES, COMMON ADVERTISEMENTS ARE ARRANGED BY THE ASSOCIATE S THROUGH ADVERTISEMENT AGENCIES WHICH WAS COMMON FOR ALL THE PARTIES INCLUDING THE ASSESSEE. THE EXPENSES I NCURRED BY THE ASSOCIATION ON BEHALF OF THE REGIONAL CENTRE S ARE SUBSEQUENTLY RECOVERED BY IT FROM THEM AS THEIR SHA RE IN COMMON EXPENDITURE. THE PAYMENT OF RS. 10,56,169/- WAS MADE BY ASSESSEE TO THE ASSOCIATION AS REIMBURSEMEN T OF ITS SHARE OF COMMON ADVERTISEMENT EXPENSES INCURRED BY THAT ASSOCIATION. IT WAS MADE CLEAR THAT ASSOCIATI ON WAS NOT AN ADVERTISEMENT AGENCY AND RELATIONSHIP BETWEE N PAYEE AND PAYER WAS THAT OF AN ASSOCIATION AND ITS MEMBER AND NOT THAT OF CONTRACTOR AND CONTRACTEE AS CONTEM PLATED UNDER SECTION 194C OF THE ACT THEREFORE, NO TDS IS LIABLE TO BE DEDUCTED. THE CONTRACT WAS ENTERED INTO BETWEEN ASSOCIATION AND THE ADVERTISEMENT AGENCY AND PAYMEN T HAS BEEN MADE BY THE ASSOCIATION TO THE ADVERTISEMENT A GENCY. THE ASSESSEE ONLY REIMBURSED ITS SHARE OF EXPENDITU RE TO THE ASSOCIATION. THE ASSESSEE SUBMITTED DETAILS IN RESPECT THEREOF AND IT WAS SUBMITTED THAT NO ADDITION COULD BE MADE AGAINST THE ASSESSEE BECAUSE THERE IS NO RELAT IONSHIP OF CONTRACTOR AND CONTRACTEE BETWEEN ASSESSEE AND T HE ASSOCIATION. THERE IS NO AGREEMENT BETWEEN THE ASS ESSEE AND THE ADVERTISEMENT AGENCY. 5. THE LD. CIT(APPEALS) QUOTING THE SECTION 194C(1) OF THE ACT IN HIS FINDINGS, DISMISSED THIS GROUND OF A PPEAL OF THE ASSESSEE WITHOUT GIVING ANY REASONS FOR DECISIO N ON THE SAME. 4 6. AFTER CONSIDERING RIVAL SUBMISSIONS, I AM OF THE VIEW THE MATTER REQUIRES RE-CONSIDERATION AT THE LEVEL O F THE LD. CIT(APPEALS). THE ASSESSEE FILED COPY OF CERTIFICA TE FROM ASSOCIATION AT PAGE 13 OF THE PAPER BOOK IN WHICH I T WAS CERTIFIED THAT THE ASSOCIATION GIVES ADVERTISEMENT OF ALL THE LEARNING CENTRES OF PUNJAB TECHNICAL UNIVERSITY, DI STANCE EDUCATION PROGRAM IN PUNJAB TO THE PRINT MEDIA. TH E SHARES OF COST OF ADVERTISEMENT IS RECOVERED FROM T HE REGIONAL CENTRES. THE AMOUNT IN QUESTION WAS RECOV ERED FROM THE ASSESSEE AS ITS SHARE FOR ADVERTISEMENT. THE ENTIRE TDS OF WHOLE AMOUNT WAS DEDUCTED AND DEPOSIT ED IN THE BANK. PB-14 TO 54 ARE THE DETAILS OF TDS DEDUC TED BY ASSOCIATION AND PAID. THE LD. COUNSEL FOR THE ASSE SSEE ALSO RELIED UPON ORDER OF ITAT CHANDIGARH BENCH IN THE C ASE OF M/S VAISHNO MAA COMPUTERS, PATIALA DATED 25.11.2011 IN ITA 649/2011 AND 723/2011 IN WHICH THE IDENTICAL IS SUE WAS RAISED IN THE APPEAL OF THE ASSESSEE ON GROUND NO. 1 (PB-89). THE SUBMISSIONS OF THE ASSESSEE WERE IDEN TICAL AS HAVE BEEN RAISED IN THE PRESENT APPEAL. THE TRIBUN AL IN THE ABSENCE OF MATERIAL ON RECORD, RESTORED THE MAT TER BACK TO THE FILE OF LD. CIT(APPEALS) FOR DECIDING THE IS SUE AFRESH. 6(I) THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO PB-56 WHICH IS ORDER OF LD. CIT(APPEALS), PATIALA DATED 18.09.2015 FOR ASSESSMENT YEAR 2008-09 OF M/S VAISH NO MAA COMPUTERS PASSED IN VIEW OF THE DIRECTIONS OF T HE ITAT CHANDIGARH BENCH AND AN IDENTICAL ISSUE WAS CONSIDE RED BY LD. CIT(APPEALS) IN THE LIGHT OF MATERIAL ON REC ORD AND LD. CIT(APPEALS) HELD THAT THE RELATIONSHIP BETWEEN ALL 5 INDIA PTU-DEP ASSOCIATION AND THE ASSESSEE FIRM IS NOT OF CONTRACTOR AND CONTRACTEE BUT IS OF ASSOCIATION AND MEMBERS. THE PAYMENTS MADE BY THE ASSESSEE FIRM TO THE ASSOCIATION ARE ACTUALLY IN THE NATURE OF REIMBURSE MENT OUT OF ASSESSEE'S SHARE OF COMMON ADVERTISEMENT INCURRE D BY THE ASSOCIATION, THEREFORE, ASSESSEE IS NOT LIABLE TO DEDUCT TDS AND APPEAL OF THE ASSESSEE WAS ACCORDINGLY ALLO WED. IT, THEREFORE, APPEARS THAT THE LD. CIT(APPEALS) HA S NOT CONSIDERED THESE DETAILS FILED ON RECORD AND THE OR DER OF THE ITAT AND LD. CIT(APPEALS), PATIALA IN THE CASE OF M/S VAISHNO MAA COMPUTERS (SUPRA) WHICH HAVE DECIDED IDENTICAL POINT IN ISSUE. THE LD. CIT(APPEALS) DID NOT PASS THE REASONED ORDER IN THIS MATTER, THEREFORE, ORDER IS VIOLATION OF SECTION 250(6) OF THE INCOME TAX ACT. IN THIS VIEW OF THE MATTER, I SET ASIDE THE ORDERS OF AUTHO RITIES BELOW AND RESTORE THIS ISSUE TO THE FILE OF LD. CIT (APPEALS) WITH DIRECTION TO RE-DECIDE THIS ISSUE IN THE LIGHT OF EVIDENCE AND MATERIAL ON RECORD PRODUCED BY ASSESSE E AND IN THE LIGHT OF ORDER OF ITAT CHANDIGARH BENCH AND LD. CIT(APPEALS) PATIALA IN THE CASE OF M/S VAISHNO MAA COMPUTERS (SUPRA). THE LD. CIT(APPEALS) SHALL GIVE REASONABLE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IN THE RESULT, GROUND NO. 1 OF APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 7. ON GROUND NO. 2 ASSESSEE CHALLENGED THE DISALLOW ANCE OF RS. 1,07,600/- ON ACCOUNT OF INTEREST. THE ASSE SSING OFFICER FOUND THAT THERE ARE ADVANCES MADE BY ASSES SEE TO FOUR PERSONS IN A SUM OF RS. 14.25 LACS TO MRS. GOL DY 6 KAMBOJ (WIFE), MRS. HARPREET KAUR (SISTER), SHRI SU KHBIR SINGH (NEPHEW) AND SMT. SURINDER KAUR, MOTHER-IN-LA W OF THE ASSESSEE. THE ASSESSING OFFICER ASKED THE ASSE SSEE TO EXPLAIN THE PURPOSE OF GIVING ADVANCES AND AS TO WH Y PROPORTIONATE INTEREST ON THIS MAY NOT BE DISALLOWE D OUT OF INTEREST EXPENSES DEBITED TO THE PROFIT & LOSS ACCO UNT. THE ASSESSING OFFICER NOTED THAT ALL THESE ADVANCES ARE OF PERSONAL NATURE AND IN NO WAY INCIDENTAL TO THE BUS INESS OF THE ASSESSEE. THE ASSESSEE HAS NOT CHARGED ANY INT EREST ON THESE ADVANCES WHEREAS HE HAS PAID INTEREST OF R S. 4,58,170/- TO SHRI AVTAR SINGH, HUF AND RS. 40,140/ - TO M/S JETKING. SINCE LOANS RAISED BY THE ASSESSEE HA VE NOT BEEN UTILIZED FOR BUSINESS PURPOSES TO THE EXTENT O F INTEREST FREE ADVANCES MADE TO THE PERSONS AS ABOVE , THE INTEREST CHARGEABLE ON THESE ADVANCES WAS, THEREFOR E, HELD NOT TO BE ALLOWABLE. THE ASSESSING OFFICER, ACCORD INGLY, DISALLOWED RS. 1,07,600/-. 8. THE ASSESSEE CHALLENGED ADDITION BEFORE LD. CIT(APPEALS) AND IT WAS SUBMITTED THAT ASSESSEE HAS CAPITAL OF RS. 14,51,117/-. FURTHER, THERE WAS INT EREST FREE LOAN OF RS. 5 LACS. OUT OF THE SAID AMOUNTS, HE HA S ADVANCED FEW SUMS TO HIS FAMILY MEMBERS. IT WAS FU RTHER SUBMITTED THAT TOTAL CAPITAL OF THE ASSESSEE WITH P ROFIT COMES TO RS. 21,41,405/- WHICH CAN BE WITHDRAWN AT ANY TIME, THEREFORE, ADDITION IS UNJUSTIFIED. THE LD. CIT(APPEALS) DID NOT ACCEPT CONTENTION OF THE ASSES SEE AND DISMISSED THIS GROUND OF APPEAL OF THE ASSESSEE. 7 9. AFTER CONSIDERING RIVAL SUBMISSIONS, I AM OF THE VIEW ADDITION IS WHOLLY UNJUSTIFIED. THE ASSESSEE IS PR OPRIETOR OF CHANDIGARH COMPUTER CENTRE AND IN THE ASSESSMENT YEAR UNDER APPEAL, HAS CAPITAL OF RS. 14,51,117/-. THE NET PROFIT IN THE YEAR UNDER CONSIDERATION COMES TO RS. 6,90,288/-, THUS, TOTAL CAPITAL OF ASSESSEE COMES T O RS. 21,41,405/-. FURTHER, ASSESSEE HAS INTEREST FREE UN SECURED LOAN OF RS. 5 LACS FROM SHRI JOGINDER SINGH. THESE AMOUNTS/FUNDS ARE SUFFICIENT TO COVER UP THE INTERE ST FREE ADVANCES GIVEN TO THE FAMILY MEMBERS IN A SUM OF RS . 14,25,000/-. HON'BLE PUNJAB & HARYANA HIGH COURT I N THE CASE OF KAPSON ASSOCIATES 381 ITR 204 HELD THAT WHEN ASSESSEE HAVING SUFFICIENT INTEREST FREE ADVANCES T O COVER INTEREST FREE ADVANCES, NO DISALLOWANCE UNDER SECTI ON 36(1)(III) COULD BE MADE. FOLLOWING THE ABOVE JUDGEMENT AND CONSIDERING FACTS OF THE CASE, I SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND DELETE THE ADDITION OF RS. 1, 07,600/-. THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 10. ON GROUND NO.3, ASSESSEE CHALLENGED THE ADDITIO N OF RS. 6,50,000/- PAID ON ACCOUNT OF FRANCHISE FEES AS CAPITAL EXPENDITURE. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE IN THE PROFIT & LOSS ACCOUNT HAS DEBITED A SUM OF R S. 6,50,000/- ON ACCOUNT OF FRANCHISE FEES PAID TO IND IAN INSTITUTE OF HARDWARE TECHNOLOGY LTD., BANGALORE. THE ASSESSING OFFICER ASKED THE ASSESSEE AS TO WHY THE SAME BE NOT TREATED AS CAPITAL EXPENDITURE AS THE SAME HAS BROUGHT ADVANTAGE OF ENDURING NATURE. THE ASSESSEE SUBMITT ED THAT AMOUNT HAS BEEN PAID FOR AFFILIATION TO IIHT L TD. FOR 8 PATIALA AND CHANDIGARH CENTRE. IT IS ONLY LICENCE FEES WHICH IS NOT REFUNDABLE AT ALL. IT WAS SUBMITTED T HAT ASSESSEE IS YEARLY PAYING ROYALTY EVEN FOR PATIALA AND CHANDIGARH CENTRE IN ADDITION OF THIS LUMPSUM CHARG ES PAID ONCE FOR ALL. IT IS ONLY LICENCE FEES WHICH D O NOT HAVE ANY ENDURING BENEFIT. THE ASSESSING OFFICER DID NO T ACCEPT CONTENTION OF THE ASSESSEE AND FOUND THAT ASSESSEE HAS BEEN APPOINTED FOR A PERIOD OF THREE YEARS AND IIHT AFFILIATION FEES IS ONE TIME FEES PAID TOWARDS TECH NICAL TRANSFER AND LICENCE FROM IIHT FOR A PERIOD OF THE FRANCHISE AGREEMENT WHICH DOES NOT INCLUDE THE AFFILIATION FE ES PAYABLE TO THE MAJOR IT COMPANIES FOR OBTAINING EDU CATION LICENCE OR AFFILIATION FROM THEM. IT WAS, THEREFOR E, CONSIDERED TO BE CAPITAL EXPENDITURE AND ADDITION W AS MADE ACCORDINGLY. 11. THE ASSESSEE SUBMITTED BEFORE LD. CIT(APPEALS) THAT HE IS RUNNING VARIOUS CENTRES IN PUNJAB TO IMPORT INFO RMATION TECHNOLOGY WHICH INCLUDES COMPUTER COURSE. TO GIVE COMPUTER COURSE TO THE STUDENTS, IT GOT FRANCHISE F ROM IIHT LTD. WHICH IS ENGAGED IN RESEARCH AND DEVELOPMENT MARKETING OF IT SERVICES AND IT EDUCATION SERVICES. RS. 6,50,000/- WAS PAID FOR TWO CENTRES OF CHANDIGARH A ND PATIALA. ROYALTY PER STUDENT HAS TO BE PAID. THE AMOUNT IS NOT REFUNDABLE AND NO ENDURING BENEFITS HAVE BEE N OBTAINED. IT WAS THE LICENCE FEES PAID FOR THE SAM E. THE ASSESSEE RELIED UPON DECISION OF HON'BLE PUNJAB & H ARYANA HIGH COURT IN THE CASE OF CIT V GROZ BECKERT ASIA L TD. 351 ITR 196 AND ORDER OF ITAT CHANDIGARH IN THE CASE O F ACIT 9 V M/S VAISHNO MAA COMPUTERS (SUPRA). THE LD. CIT(APPEALS), HOWEVER, DID NOT ACCEPT CONTENTION OF THE ASSESSEE AND FOUND THAT AMOUNT PAID IS TOWARDS CAPI TAL EXPENDITURE AND DISMISSED THIS GROUND OF APPEAL OF THE ASSESSEE. 12. AFTER CONSIDERING RIVAL SUBMISSIONS, I AM OF TH E VIEW ADDITION IS WHOLLY UNJUSTIFIED. HON'BLE FULL BENCH OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT V GROZ BECKERT ASIA LTD. 351 ITR 196 HELD AS UNDER : IF AN ITEM OF EXPENDITURE IS TO BE CONSIDERED CAPI TAL IN NATURE, THE EXPENDITURE SHOULD BRING INTO EXISTENCE AN ASSET OR AN ADVANTAGE FOR THE ENDURING BENEFIT OF A TRADE. MEMB ERSHIP FEE PAID TO A CLUB DOES NOT BRING INTO EXISTENCE AN ASS ET OR AN ADVANTAGE FOR THE ENDURING BENEFIT OF THE BUSINESS. IT IS AN EXPENDITURE INCURRED FOR THE PERIOD OF MEMBERSHIP AND IS NOT LONG LASTING. BY SCRIBING TO THE MEMBERSHIP OF A CLUB, N O CAPITAL ASSET IS CREATED OR COMES INTO EXISTENCE. BY SUCH MEMBERS HIP, A PRIVILEGE TO USE FACILITIES OF A CLUB ALONE, ARE CONFER RED ON THE ASSESSEE AND THAT TOO FOR A LIMITED PERIOD. SUCH EXPENS ES ARE FOR RUNNING THE BUSINESS WITH A VIEW TO PRODUCE THE BENEFITS TO ASSESSEE. CONSEQUENTLY, IT CANNOT BE TREATED AS CAP ITAL ASSET. HELD ACCORDINGLY, DISMISSING THE APPEAL, THAT THE CORPO RATE MEMBERSHIP TO THE GOLF CLUB WAS FOR A LIMITED PERIO D OF FIVE YEARS. IT WAS OBTAINED FOR RUNNING THE BUSINESS WITH A VIE W TO PRODUCE PROFIT. THUS, THE CORPORATE MEMBERSHIP FEE PAID TO THE GOLF CLUB WAS OF REVENUE EXPENDITURE. 13. PB-89 IS ORDER OF ITAT CHANDIGARH IN THE CASE O F M/S VAISHNO MAA COMPUTERS IN WHICH THE TRIBUNAL CONSIDE RED THE IDENTICAL ISSUE IN DEPARTMENTAL APPEAL IN WHICH THE LD. CIT(APPEALS) DELETED THE ADDITION MADE BY ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF LICENCE FEES EXPENSES. 10 THE ASSESSEE MADE A CLAIM OF DEDUCTION IN PROFIT & LOSS ACCOUNT FOR MAKING PAYMENT TOWARDS LICENCE FEES TO M/S PTU AND CAL-C. THE ASSESSEE CLAIMED THAT IT HAS ME RELY ACQUIRED THE USE OF LICENCE TO OPERATE DISTANCE EDU CATIONAL PROGRAM FOR ITS EDUCATIONAL CENTRES. IT WAS, THERE FORE, CLAIMED THAT IT IS REVENUE EXPENDITURE IN NATURE. THE LD. CIT(APPEALS) IN HIS FINDINGS NOTED THAT ASSESSEE HA D MERELY ACQUIRED THE USER OF A LICENCE TO OPERATE DISTANCE EDUCATIONAL PROGRAM OF TWO INSTITUTIONS. THE PAYME NT MADE FOR RENEWAL OF LICENCE EVERY YEAR/THREE YEARS WAS FOR USAGE AND COULD NOT BE HELD TO BE CAPITAL EXPENDITU RE. THE TRIBUNAL DISMISSED DEPARTMENTAL APPEAL. THE ASSESS EE IN THE PAPER BOOK HAS FILED COPY OF THE MEMORANDUM OF UNDERSTANDING BETWEEN ASSESSEE AND IIHT LTD. AT PAG E 82 OF THE PAPER BOOK WHICH SUPPORTS THE CONTENTION OF THE ASSESSEE THAT ASSESSEE OBTAINED LICENCE FROM IIHT L TD. FOR EDUCATION AND TRAINING IN INFORMATION TECHNOLOGY AS PER TERMS AND CONDITIONS. THEREFORE, ASSESSEE PAID LIC ENCE FEES FOR ITS EDUCATIONAL PROGRAMS AND IT WAS MEANT FOR T HREE YEARS. 14. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF THE ABOVE DECISIONS, IT IS CLEAR THAT IN THE WAY OF OBT AINING FRANCHISE FOR EDUCATIONAL PROGRAM AND PAYING LICENC E FEES, NO CAPITAL ASSET CAME INTO EXISTENCE AND THERE WAS NO ADVANTAGE OF ENDURING BENEFIT TO THE BUSINESS OF TH E ASSESSEE. SINCE THERE IS NO EXISTENCE OF ANY ASSET AND NO ENDURING BENEFIT HAVE BEEN TAKEN BY THE ASSESSEE, THEREFORE, AUTHORITIES BELOW WERE WHOLLY UNJUSTIFIE D IN 11 CONSIDERING IT TO BE CAPITAL EXPENDITURE IN NATURE. THE EXPENSES ARE CLEARLY REVENUE IN NATURE. I, THEREFO RE, SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND DELETE TH E ADDITION. THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 15. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED : 19 TH JULY,2016. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT CHANDIGARH