ACIT, New Delhi V. M/s. Graziano Transmissiion India Pvt. Ltd., New Delhi

ITA 4513/DEL/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0077 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 20-05-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 14-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RIS GILL
• Assessee Lawyers: PIYUSH CHAWLA
• Keywords: Earning of tax free income; Revenue expenditure; Capital expenditure
• Section: 142(1); 14A; 37(1); 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH C, NEW DELHI) BEFORE SHRI G. C. GUPTA, HONBLE VICE PRESIDENT AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO.4513 /DEL/2014 ASSESSMENT YEAR : 2009-10 ACIT, CIRCLE 12(1), VS. M/S. GRAZIANO TRANSMISSION INDIA P. LTD. NEW DELHI D-8 (BASEMENT) INDUSTRIAL SHED, DSIDC PACKAGING COMPLEX, KIRTI NAGAR, NEW DELHI GIR / PAN:AAACG4258M (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RIS GILL, CIT DR RESPONDENT BY : SHRI PIYUSH CHAWLA, CA DATE OF HEARING : 20.05.2015 DATE OF PRONOUNCEMENT : 27.05.2015 ORDER PER T.S. KAPOOR, AM: THIS IS AN APPEAL FILED BY REVENUE AGAINST THE ORD ER OF LD. CIT(A) DATED 30.05.2014. THE REVENUE HAS TAKEN FOUR EFFEC TIVE GROUNDS OF APPEAL WHICH ARE REPRODUCED BELOW: 1. ON THE FACT AND CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS. 1,07,45,4 33/- ON ACCOUNT OF TRADE MARK FEE BY HOLDING THAT IT WAS A REVENUE EXP ENDITURE AND WITHOUT CONSIDERING THAT RIGHT TO USE THE TRADE MAR K ACQUIRED BY THE ASSESSEE WAS AN INTANGIBLE ASSETS AS DEFINED U/S 32 OF THE IT ACT? 2. ON THE FACT AND CIRCUMSTANCES OF THE CASE, THE L D CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF LICENSEE FEES OF RS. 6,15,262,1- BY HOLDING THAT IT AS REVENUE EXPENDITURE AND WITHO UT CONSIDERING THAT THE ASSESSEE HAD ACQUIRED PROPORTIONATE RIGHTS TO U SE THE SOFTWARE, WHICH WAS AN INTANGIBLE ASSETS AS DEFINED U/S 32 OF THE ACT. ITA NO.4513/DEL/2014 2 3. ON THE FACT AND CIRCUMSTANCES OF THE CASE, THE L D CIT(A) HAS ERRED IN HOLDING THAT AO'S LACK OF SATISFACTION WIT H THE CLAIM OF APPELLANT WAS NOT ON ANY COGENT GROUNDS, WITH REGAR D TO THE ACCOUNTS AND THEREBY DELETING ADDITION OF RS. 5,070/- MADE B Y AO U/S 14A R.W.R. 14A. 4. ON THE FACT AND CIRCUMSTANCES OF THE CASE, THE L D CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS. 90,92,093 /- ON ACCOUNT OF CURRENT REPAIR IN SPITE OF THE FACTS THAT THE ASSES SEE HAD NOT FURNISHED CERTAIN RELEVANT AND CRUCIAL INFORMATION IN THE REQ UISITE PRESCRIBED FORMAT TO ENABLE THE AO TO ASCERTAIN AS TO WHETHER THE EXPENDITURE IS ALLOWABLE UNDER CURRENT REPAIR AS REQUIRED AS PER T HE PROVISIONS OF SECTION 142(1) WHEREIN INTER ALIA, THE ASSESSEE IS REQUIRED TO FURNISH THE REQUISITE INFORMATION/DETAIL ETC. IN THE PRESCR IBED MANNER AND IN SUCH FORM. 2. AT THE OUTSET, LD. A.R. INVITED OUR ATTENTION TO THE ORDER OF TRIBUNAL PASSED ON 19.12.2014 IN THE CASE OF ASSESSEE ITSELF FOR ASSESSMENT YEAR 2008-09 AND SUBMITTED THAT FIRST TWO GROUNDS OF APP EAL WERE COVERED IN FAVOUR OF ASSESSEE BY THE ABOVE SAID ORDER. 3. LD. D.R. THOUGH CONTESTED THE GROUNDS OF APPEAL AND RELIED UPON ASSESSMENT ORDER BUT CONCEDED THAT THE ABOVE GROUND S WERE COVERED AGAINST REVENUE BY THE ORDER OF TRIBUNAL IN I.T.A. NO. 5536 /DEL/2013 IN ORDER DATED 19.12.2014. LD. D.R. INVITED OUR ATTENTION TO GROU ND NO.4 AND SUBMITTED THAT A.O. DURING ASSESSMENT PROCEEDINGS THE A.O. RE QUESTED TO THE ASSESSEE TO SUBMIT INFORMATION ON ACCOUNT OF REPAIR & MAINTE NANCE IN THE PRESCRIBED FORM BUT THE ASSESSEE DID NOT FURNISH THE COMPLETE INFORMATION AND LEFT THE CRUCIAL COLUMNS BLANK AND THEREFORE THE A.O. HAD RI GHTLY DISALLOWED THE CLAIM OF ASSESSEE FOR REPAIRS AND MAINTENANCE AS AS SESSEE HAD NOT SUBMITTED THE COMPLETE INFORMATION. REGARDING GROUND NO.3, L D. D.R. RELIED UPON THE ASSESSMENT ORDER. ITA NO.4513/DEL/2014 3 4. LD. A.R. ON THE OTHER HAND SUBMITTED THAT THE AS SESSEE HAD CARRIED OUT REPAIR AND MAINTENANCE AND ON THE DIRECTIONS OF A.O ., COMPLETE BREAK UP OF REPAIR & MAINTENANCE WAS PROVIDED AND IN THIS RESPE CT, HE INVITED OUR ATTENTION TO PAPER BOOK PAGES 124-127 WHERE COMPLET E BREAK UP OF REPAIR & MAINTENANCE CARRIED OUT BY ASSESSEE WAS PLACED. LD . A.R. SUBMITTED THAT RECORDS FOR INFORMATION AS REQUIRED BY A.O. WAS NOT BEING MAINTAINED BY ASSESSEE AND, THEREFORE, IT COULD NOT BE FURNISHED BUT COMPLETE VOUCHERS AND INVOICES INCLUDING THE NOTE ON REPAIR & MAINTENANCE WERE FILED. HE FURTHER ARGUED THAT OUT OF 26 COLUMNS FOR INFORMATION REQUI RED BY A.O., THE INFORMATION WAS NOT FILED FOR 1,2 COLUMNS WHICH CAN NOT BE VIEWED ADVERSELY FOR DISALLOWANCE OF GENUINE CLAIM OF REPAIR & MAINT ENANCE. HE FURTHER SUBMITTED THAT THE ASSESSEE HAD CAPITALIZED THE AMO UNT WHICH REQUIRED TO BE CAPITALIZED AND THE EXPENSES INCURRED REPRESENTED R EPAIRS & MAINTENANCE IN RESPECT OF EXISTING PLANT AND MACHINERY WITH WHICH NO PRODUCTION CAPACITY HAD INCREASED AND IT WAS DUE TO NORMAL WEAR AND TEA R OF PLANT & MACHINERY. HE FURTHER SUBMITTED THAT INDEPENDENT MACHINERY PUR CHASED WAS ALREADY CAPITALIZED FOR AN AMOUNT OF RS.11.87 CRORES. LD. A.R. SUBMITTED THAT LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION AND HE STRO NGLY RELIED UPON THE ORDER OF LD. CIT(A). REGARDING GROUND NO.3, LD. A.R. REL IED UPON THE ORDER OF LD. CIT(A). 5. WE HAVE HEARD RIVAL PARTIES AND HAVE GONE THROUG H THE MATERIAL PLACED ON RECORD. WE FIND THAT THE 1 ST GROUND AGITATED BY REVENUE IS IN RESPECT OF DISALLOWANCE FOR AN AMOUNT OF RS.1,07,45,433/- WHIC H WAS PAID BY ASSESSEE ON ACCOUNT OF TRADE MARK FEE. THE A.O. HAD DISALLO WED THE SAME HOLDING THE SAME TO BE OF CAPITAL IN NATURE. WE FURTHER FIND T HAT IN I.T.A. NO. 5536/DEL/2013 THE HONBLE TRIBUNAL VIDE ORDER DATED 19.12.2014 HAS UPHELD ITA NO.4513/DEL/2014 4 THE DELETION OF SIMILAR NATURE BY LD. CIT(A) BY HOL DING THAT THE PAYMENTS MADE TO PARENT COMPANY OF ASSESSEE UNDER THE AGREEM ENT WAS NECESSARY TRADE MARK FEES. WHILE AGREEING WITH THE LD. CIT(A ), TRIBUNAL HAS RELIED UPON THE ORDER OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS G4S SECURITY SYSTEM INDIA PVT. LTD. IN I.T.A. NO. 9 43/DEL/2010, 763/DEL/2011 AND 765/DEL/2011. WE FIND THAT NATURE OF PAYMENT IN THIS YEARS IS THE SAME AND THE PAYMENT OF TRADE MARK FEE HAS BEEN PAID TO THE SAME PARENT COMPANY WHICH FINDING ARE CONTAINED IN PARA 7 OF THE TRIBUNAL ORDER AND THE SAME ARE REPRODUCED BELOW: 7. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. AS REGARDS GROUND NO. 1 IS CONCERNED, THE REVENUE HAS CHALLENGED THE IMPUGNED ORDER OF THE LD. CIT(A) IN DELETING THE DISALLOWANCE OF RS. 55,70,045/- ON ACCOUNT OF TRADE MARK FEE BY HOL DING THAT IT WAS A REVENUE EXPENDITURE AND WITHOUT CONSIDERING THAT R IGHT TO USE THE TRADE MARK ACQUIRED BY THE ASSESSEE WAS AN INTANGI BLE ASSET AS DEFINED U/S. 32 OF THE I.T. ACT. AFTER HEARING BOTH THE PARTIES ON THE ISSUE IN DISPUTE AS WELL AS AFTER GOING THROUGH TH E ORDERS PASSED BY THE REVENUE AUTHORITIES ALONGWITH ORDER DATED 11.7 .2011 PASSED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE O F CIT VS. G4S SECURITIES SYSTEM (INDIA) PVT. LTD. IN ITA NOS. 19 43/DEL/2010, 763/DEL/2011 & 765/DEL/2011 763/2011WHEREIN THE HON BLE HIGH COURT HAS ADJUDICATED THE MATTER AS UNDER:- 6. WE HAVE HEARD THE LEARNED COUNSEL FOR THE PARTI ES AND PERUSED THE RECORD. 7. AT THE OUTSET IT MAY BE NOTED THAT IT WAS FOLLOW ING AGREEMENT DATED 20.06.2002 BETWEEN GROUP 4 FALCK A/S, DENMARK AND GROUP 4 HOLDING PVT. LTD., THAT A FURTHER SUB LICEN SE AGREEMENT WAS ENTERED INTO BY GROUP 4 HOLDING PVT. LTD. AND T HE ASSESSEE. THIS SUB LICENSE AGREEMENT IS ALSO DATED 20.06.2002. 8. SIMILAR DEFINITION OF TRADE MARK, G4S KNOWHOW, A S EXISTING IN THE AGREEMENT BETWEEN G4S AND GROUP4 HOLDING PRI VATE LIMITED ARE ALSO INCORPORATED IN THE SUB LICENSE AG REEMENT. CLAUSE 4.1 OF THE SUB LICENSE AGREEMENT PROVIDES FO R THE OPERATIONAL PERIOD OF THE AGREEMENT FOR A TERM OF 5 YEAR FROM THE EFFECTIVE DATE, AND CONTINUANCE THEREAFTER FOR FURTHER ITA NO.4513/DEL/2014 5 SUCCESSIVE 5 YEARS PERIOD UNLESS EITHER PARTY GIVE 6 MONTHS WRITTEN NOTICE TO OTHER PARTY PRIOR TO THE END OF A NY SUCH 5 YEAR PERIOD THAT THE AGREEMENT SHOULD NOT BE RENEWED. CL AUSE 17 OF THE SUB LICENSE AGREEMENT ACKNOWLEDGES THAT G4F HAS THE RIGHT TO ENFORCE, OR TO ENJOY THE BENEFIT OF ANY TERM OF THIS AGREEMENT WHICH IS EXPRESSLY OR IMPLIEDLY IN FAVOUR OF G4S. I N CLAUSE 4.6 OF THE SUB LICENSE AGREEMENT, IT HAS BEEN PROVIDED THAT ON TERMINATION OR EXPIRATION OF THE SUB LICENSE AGREEM ENT, THE ASSESSEE SHALL RETURN ALL G4S KNOWHOW OBTAINED IN P URSUANT TO THE AGREEMENT. AT CLAUSE 4.7 IT HAS BEEN PROVIDED T HAT ON TERMINATION OR EXPIRATION OF THE AGREEMENT, THE APPELLANT/ASSESSEE SHALL NOT THEREAFTER MAKE ANY US E OF THE TRADE MARK, TRADE NAME OR G4F KNOWHOW AND SHALL FOR THWITH CHANGE ITS CORPORATE AND/OR TRADE NAMES. 9. FROM THE TERMS OF THE AGREEMENT IT IS NOTICED TH AT THIS ARRANGEMENT WAS FOR A PERIOD OF 5 YEARS, WHICH MAY BE EXTENDED BY ANOTHER PERIOD OF 5 YEARS UNLESS EITHER PARTY GIVES 6 MONTHS NOTICE TO THE OTHER PARTY PRIOR TO THE END OF SUCH 5 YEARS PERIOD. THE PAYMENT OF COMMISSION @ 1% WAS BA SED ON THE NET SALES AND NOT LUMPSUM. ON THE TERMINATION O F EXPIRATION OF THE SUB LICENSE AGREEMENT, THE ASSESSEE WAS TO R ETURN ALL G4F KNOWHOW OBTAINED PURSUANT TO THE SAID AGREEMENT . NOT ONLY THAT, THE ASSESSEE WAS NOT EVEN ENTITLED TO MA KE USE OF THE TRADE MARK NAME OR G4F KNOWHOW AND WAS FORTHWITH TO CHANGE ITS CORPORATE AND/OR TRADE NAMES. ALL RIGHT S AND KNOWHOW, THEREFORE, CONTINUED TO VEST IN G4F AND IT WAS ONLY THE RIGHT TO USE THE KNOWHOW THAT WAS MADE AVAILABL E TO THE ASSESSEE AND THAT TOO BASED ON ITS NET SALES. THAT MEANS ALL THE ROYALTY PAID IN THE SHAPE OF 1% OF NET SALES FOR TH E USE OF TRADE MARK AND RIGHT TO USE KNOWHOW COULD NOT BE CONSIDER ED TO BE OF ENDURING NATURE AND THUS CAPITAL EXPENDITURE. TH E EXPENDITURE WAS TO BE OF REVENUE NATURE. IN THE CAS E OF JONAS WOOD HEAD AND SONS VS. CIT, 117 ITR 55, IT WAS HELD THAT THE QUESTION REGARDING CAPITAL OR REVENUE EXPENDITURE D EPENDS ON THE TERMS OF AGREEMENT IN EACH CASE. IN THE CASE OF CIT VS. GUJARAT CARBON LTD., 254 ITR 294, IT WAS HELD THAT THE PAYMENT OF REVENUE UNDER THE AGREEMENT WAS DIRECTLY RELATAB LE TO SERVICES WHICH WERE IN THE REVENUE FIELD AND WERE A LLOWABLE AS REVENUE EXPENDITURE. IN THE CASE OF GOODYEAR (I) LT D. VS. ITO ITA NO.4513/DEL/2014 6 73 ITD 189(DELHI), THE ASSESSEE HAD NOT ACQUIRED OW NERSHIP RIGHT OF TECHNICAL KNOWHOW BUT TRANSFER OF USE OF L ICENSES. THERE WAS NO ADVANTAGE OF ENDURING NATURE AND HENCE IT WAS HELD TO BE A CASE OF REVENUE EXPENDITURE. IN THE CA SE OF TRAVANCORE SUGAR AND CHEMICALS LTD. 62 ITR 566 (SC) IT WAS HELD THAT WHENEVER A PAYMENT IS BASED ON A PERCENTA GE OF TURNOVER OR PROFITS, IT NECESSARILY HAS NO RELATION TO THE CAPITAL VALUE OF THE ASSET, BECAUSE IT CANNOT BE KNOWN AT T HE TIME OF THE AGREEMENT WHAT THE TURNOVER OR PROFITS WILL BE OVER A PERIOD OF YEARS. IN ANOTHER CASE REPORTED AS DCIT VS. SWARAJ ENGINES LTD. (2002) 124 TAXMAN 188, THE TRIBUNAL HELD, REVE NUE PAYMENT IS ALLOWABLE AS REVENUE EXPENDITURE, SINCE IT IS RELATED TO SALES AND THAT IT IS PAID FOR BETTER CONDUCT, EF FICIENCY AND IMPROVEMENT OF THE EXISTING BUSINESS OR PRODUCT MAN UFACTURED BY THE ASSESSEE. IN THE CASE OF CIT VS. LUMAX INDUS TRIES LTD. (2008) 173 TAXMAN 290 (DELHI), THIS COURT HAS ALSO HELD THAT THE PAYMENT OF LICENSE FEE ON YEAR TO YEAR BASIS FO R ACQUISITION OF TECHNICAL KNOWLEDGE WOULD NOT AMOUNT TO CAPITAL EXPENDITURE, BUT THE REVENUE EXPENDITURE. 10. FROM THE RATIO OF THE ABOVE SAID CASES, WE ARE OF THE CONSIDERED VIEW THAT UNDER THE TERMS OF THE AGREEME NT AS NOTED ABOVE, THE OWNERSHIP RIGHTS OF THE TRADE MARK AND K NOWHOW THROUGHOUT VESTED WITH G4F AND ON THE EXPIRATION OR TERMINATION OF THE AGREEMENT THE ASSESSEE WAS TO RE TURN ALL G4F KNOWHOW OBTAINED BY IT UNDER THE AGREEMENT. THE PAYMENT OF ROYALTY WAS ALSO TO BE ON YEAR TO YEAR B ASIS ON THE NET SALES OF THE ASSESSEE AND AT NO POINT OF TIME T HE ASSESSEE WAS ENTITLED TO BECOME THE EXCLUSIVE OWNER OF THE T ECHNICAL KNOWHOW AND THE TRADE MARK. HENCE, THE EXPENDITURE INCURRED BY THE ASSESSEE AS ROYALTY IS REVENUE EXPENDITURE A ND IS THEREFORE, RELATABLE UNDER SECTION 37(1) OF THE ACT . WE THUS, ANSWER THE QUESTION IN FAVOUR OF THE ASSESSEE AND A GAINST THE REVENUE AND CONSEQUENTLY DISMISS ALL THE THREE APPE ALS. 7.1 IN VIEW OF ABOVE, WE ARE OF THE CONSIDERED VIEW THAT ABOVE ISSUE IS EXACTLY THE SIMILAR TO THE ISSUE INVOLVED IN TH E PRESENT APPEAL AND COVERED BY THE AFORESAID DECISION. HENCE, RESPECT FULLY FOLLOWING THE ABOVE PRECEDENT, WE DECIDE THE ISSUE IN DISPUTE IN FAVOR OF THE ASSESSEE AND AGAINST THE REVENUE. ITA NO.4513/DEL/2014 7 6. RESPECTFULLY FOLLOWING THE ABOVE TRIBUNAL ORDER, WE DISMISS GROUND NO.1 OF THE REVENUES APPEAL. 7. GROUND NO.2 IS ALSO COVERED AGAINST REVENUE BY T HE ORDER IN EARLIER YEAR AND THE TRIBUNAL VIDE PARA 7.2 HAS DISMISSED T HE APPEAL OF REVENUE IN RESPECT OF LICENSE FEE BY HOLDING AS UNDER: 7.2 AS REGARDS GROUND NO. 2 IS CONCERNED, THE REVE NUE HAS CHALLENGED THE IMPUGNED ORDER OF THE LD. CIT(A) I N DELETING THE DISALLOWANCE OF LICENSE FEE OF RS. 3,44,550/- BY HO LDING IT AS REVENUE EXPENDITURE AND WITHOUT CONSIDERING THAT THE ASSESS EE HAD ACQUIRED PROPORTIONATE RIGHTS TO USE THE SOFTWARE, WHICH WAS AN INTANGIBLE ASSET AS DEFINED U/S. 32 OF THE I.T. ACT. AFTER H EARING BOTH THE PARTIES ON THE ISSUE IN DISPUTE AS WELL AS AFTER GOING THRO UGH THE ORDERS PASSED BY THE REVENUE AUTHORITIES ALONGWITH ORDER DATED 04.11.2011 PASSED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. ASAHI INDIA SAFETY GLASS LTD. IN ITA NOS. 1110/200 6 & 1111/2006 WHEREIN THE HONBLE HIGH COURT HAS ADJUDICATED THE MATTER AS UNDER:- 8. HAVING HEARD THE LEARNED COUNSEL FOR THE PARTIE S, WHAT HAS EMERGED ON FACTS AS FOUND BY THE AUTHORITIES BELOW IS AS FOLLOWS: THE ASSESSEE IS IN THE BUSINESS OF MANUFAC TURING SAFETY GLASS WHICH IS USED IN AUTOMOBILES. THUS THE MAIN S OURCE OF INCOME OF THE ASSESSEE IS FROM THE SAID ACTIVITY. T HE ASSESSEE APPEARS TO HAVE ENTERED INTO AN AGREEMENT WITH ARTH UR ANDERSON & ASSOCIATES IN THE FINANCIAL YEAR 1996-97 (ASSESSMENT YEAR 1997-98) FOR INSTALLATION OF A SOF TWARE APPLICATION FOR ASSISTANCE IN AREAS RELATED TO FINA NCIAL ACCOUNTING, INVENTORY AND PURCHASE. IT HAS EMERGED THAT AN OFFER WAS MADE IN RESPECT OF SUCH A SOFTWARE APPLIC ATION BY ARTHUR ANDERSON & ASSOCIATES, WHICH FIND A REFLECTI ON IN A LETTER DATED 25.06.1996. THE SAID AGREEMENT BETWEEN THE ASSESSEE AND ARTHUR ANDERSON & ASSOCIATES ALSO REQU IRED THE ASSESSEE TO ENTER INTO A BACK-TO-BACK AGREEMENT WIT H ORACLE. THE REASONS PERHAPS BEING THAT THE SOFTWARE APPLICA TION SUPPLIED BY THE AURTHOR ANDERSON & ASSOCIATES WORKE D ON ITA NO.4513/DEL/2014 8 ORACLE APPLICATION. IT IS PRECISELY FOR THIS REASON THAT ARTHUR ANDERSON & ASSOCIATES REQUIRED THE ASSESSEE TO ENTE R INTO A LICENCE AGREEMENT WITH ORACLE TITLED MASTER SOFTWAR E LICENCE AND SERVICES AGREEMENT. THE ASSESSEE WAS THUS, REQU IRED TO PAY: APART FROM THE FEE TO ARTHUR ANDERSON & ASSOCI ATES QUA ITS AGREEMENT WITH IT; LICENCE FEE TO ORACLE. AS A MATT ER OF FACT ORACLE ALSO OFFERED SUPPORT AND MAINTENANCE SERVICE S FOR WHICH A FURTHER ADDITIONAL FEE WAS REQUIRED TO BE P AID TO ORACLE. 8.1 THE ASSESSEE THUS ADMITTEDLY IN RESPECT OF THE AFORESAID TRANSACTIONS INCURRED AN EXPENDITURE TO THE TUNE OF RS 1,36,77,664/- AND RS 1,70,68,811/- IN ASSESSMENT Y EARS 1997- 98 AND 1998-99 RESPECTIVELY. IN THE BOOKS OF ACCOUN TS FOR THE ASSESSMENT YEARS 1997-98 THE ASSESSEE HAD NOT WRITT EN OFF ANY SUM, WHILE IN THE SUCCEEDING ASSESSMENT YEAR, I.E., 1998-99 THE ASSESSEE HAD WRITTEN OFF A PART OF THE EXPENDITURE AMOUNTING TO RS 9,91,228/-. 8.2 GIVEN THESE FACTS, COULD IT BE SAID THAT THE EX PENDITURE INCURRED BY THE ASSESSEE IN THE AFOREMENTIONED ASSE SSMENT YEARS WAS IN THE NATURE OF CAPITAL EXPENDITURE. 9. THE REVENUE IN SUPPORT OF ITS STAND HAS TAKEN RE COURSE TO THE TEST OF ENDURING BENEFIT. IT IS IN OUR VIEW NOW SOM EWHAT TRITE TO SAY THAT THE TEST OF ENDURING BENEFIT IS NOT A CERT AIN OR A CONCLUSIVE TEST WHICH THE COURTS CAN APPLY ALMOST B Y ROTE. WHAT IS REQUIRED TO BE SEEN IS THE REAL INTENT AND PURPO SE OF THE EXPENDITURE AND WHETHER THE EXPENDITURE RESULTS IN CREATION OF FIXED CAPITAL FOR THE ASSESSEE. IT IS IMPORTANT TO BEAR IN MIND THAT WHAT IS REQUIRED TO BE SEEN IS NOT WHETHER THE ADVANTAGE OBTAINED LASTS FOREVER BUT WHETHER THE EXPENSE INCU RRED DOES AWAY WITH A RECURRING EXPENSE(S) DEFRAYED TOWARDS R UNNING A BUSINESS AS AGAINST AN EXPENSE UNDERTAKEN FOR THE B ENEFIT OF THE BUSINESS AS A WHOLE. IN OTHER WORDS, THE EXPENDITUR E WHICH IS INCURRED, WHICH ENABLES THE PROFIT MAKING STRUCTURE TO WORK MORE EFFICIENTLY LEAVING THE SOURCE OF THE PROFIT M AKING STRUCTURE UNTOUCHED, WOULD IN OUR VIEW BE AN EXPENS E IN THE NATURE OF REVENUE EXPENDITURE. FINE TUNING BUSINESS OPERATIONS ITA NO.4513/DEL/2014 9 TO ENABLE THE MANAGEMENT TO RUN ITS BUSINESS EFFECT IVELY, EFFICIENTLY AND PROFITABLY; LEAVING THE FIXED ASSET S UNTOUCHED WOULD BE AN EXPENDITURE IN THE NATURE OF REVENUE EX PENDITURE EVEN THOUGH THE ADVANTAGE MAY LAST FOR AN INDEFINIT E PERIOD. TEST OF ENDURING BENEFIT OR ADVANTAGE WOULD THUS CO LLAPSE IN SUCH LIKE CASES. IT WOULD IN OUR VIEW BE ONLY TRUER IN CASES WHICH DEAL WITH TECHNOLOGY AND SOFTWARE APPLICATION , WHICH DO NOT IN ANY MANNER SUPPLANT THE SOURCE OF INCOME OR ADDED TO THE FIXED CAPITAL OF THE ASSESSEE. [SEE ALEMBIC CHE MICAL WORKS CO. LTD. VS CIT (1989) 177 ITR 377; CIT VS J.K. SYN THETICS (2009) 309 ITR 371 AT PAGE 412 AND CIT VS. INDIAN V ISIT.COM (SUPRA)]. 9.1. THIS IS THE APPROACH WHICH THE SUPREME COURT H AS APPLIED EVEN IN CASES WHERE THERE IS A ONCE FOR ALL OR A LU MP SUM PAYMENT. WHAT IS TO BE SEEN IN THE FACTS OF THIS CA SE, AS ALREADY NOTICED BY US HEREINABOVE, THAT THE ASSESSING OFFIC ER AS A MATTER OF FACT HAS RETURNED A FINDING THAT THE EXPENDITURE UNDERTAKEN WAS FOR OVERHAULING THE ACCOUNTANCY OF THE ASSESSEE AND TO EFFICIENTLY TRAIN THE ACCOUNTING STAFF OF THE ASSES SEE. THE TRIBUNAL, WHICH IS DECIDEDLY THE FINAL FACT FINDING AUTHORITY HAS AFTER NOTICING THE MATERIAL ON RECORD OBSERVED THAT THE EXPENDITURE WAS INCURRED UNDER VARIOUS SUB-HEADS, W HICH INCLUDED LICENCE FEE, ANNUAL TECHNICAL SUPPORT FEE, PROFESSIONAL CHARGES, DATA ENTRY OPERATOR CHARGES, TRAINING CHAR GES AND TRAVELLING EXPENSES. THE FINAL FIGURE WAS A CONSOLI DATION OF EXPENSES INCURRED UNDER THESE SUB-HEADS. THE TRIBUN AL, IN OUR VIEW, AND RIGHTLY SO, CAME TO THE CONCLUSION THAT N ONE OF THESE RESULTED IN EITHER CREATION OF A NEW ASSET OR BROUG HT FORTH A NEW SOURCE OF INCOME FOR THE ASSESSEE. THE TRIBUNAL CLA SSIFIED THE SAID EXPENSES AS BEING RECURRING IN NATURE TO UPGRA DE AND/OR TO RUN THE SYSTEM. 10. IN THE BACKGROUND OF THE AFOREMENTIONED FINDING S, IT CANNOT BE SAID THAT THE EXPENSES BROUGHT ABOUT IN AN ENDUR ING BENEFIT TO THE ASSESSEE. THE ASSESSING OFFICER WAS PERHAPS SWAYED BY THE FACT THAT IN THE SUCCEEDING FINANCIAL YEAR, I.E ., 1997-98 (ASSESSMENT YEAR 1998-99), THE AMOUNT SPENT WAS LAR GE. FIRST OF ALL, THE EXTENT OF THE EXPENDITURE CANNOT BE A DECI SIVE FACTOR IN ITA NO.4513/DEL/2014 10 DETERMINING ITS NATURE. AS OBSERVED BY THE TRIBUNAL , THE ASSESSEE IN THE RELEVANT ASSESSMENT YEAR HAD A TURN OVER OF RS 150 CRORES AND THAT EVEN WITHOUT THIS EXPENDITURE I T WOULD HAVE CONTINUED TO ACHIEVE THE SAID TURNOVER; THOUGH THE EXPENDITURE INCURRED IN ISSUE WOULD HAVE ENABLED IT TO RUN ITS BUSINESS MORE EFFICIENTLY. THEREFORE, THE RATIONALE SUPPLIED BY T HE ASSESSING OFFICER IN SUPPORT OF ITS ORDER WHICH FOUND RESONAN CE IN SUBMISSIONS OF THE LEARNED COUNSEL FOR THE REVENUE IS, IN OUR VIEW FLAWED AND, HENCE IT WOULD HAVE TO BE REJECTED . 10.1. SECONDLY, THE MERE FACT THAT THE ASSESSING OF FICER RECORDS THAT THE EXPENDITURE, IN FINANCIAL YEAR 1997-98 (AS SESSMENT YEAR 1998-99), WAS INCURRED TOWARDS WHAT HE TERMS A S AN ON- GOING PROJECT WOULD NOT IPSO FACTO GIVE IT A COLOUR OF CAPITAL EXPENDITURE. A CAREFUL READING OF THE TRIBUNAL S JUDGMENT SHOW THAT AFTER NOTICING THE SUBMISSION OF THE ASSE SSEE THAT THE EXPENDITURE INCURRED IN THE SAID ASSESSMENT YEAR WA S FOR REMOVING DEFICIENCIES WHICH WERE FOUND IN THE SOFTW ARE INSTALLED IN THE EARLIER ASSESSMENT YEAR, AND THAT, OUT OF A SUM OF RS 1.71 CRORES A SUM OF RS 49 LACS WAS INCURRED TO MODIFY, CUSTOMIZE AND UPGRADE THE SOFTWARE INSTALLED, WHILE THE BALANCE EXPENDITURE WAS USED FOR DEVELOPMENT AND IMPLEMENTA TION IT RETURNED A FINDING THAT THE EXPENSES WERE INCURRED TO UPGRADE AND RUN THE SYSTEM. IN VIEW OF THESE FINDINGS WE AR E OF THE OPINION THAT ASSESSING OFFICER DISCOVERED AN ERRONE OUS PRINCIPLE ON THE BASIS OF WHICH HE DENIED THE EXEMP TION TO THE ASSESSEE. 11. SOFTWARE IS NOTHING BUT ANOTHER WORD FOR COMPUT ER PROGRAMMES, I.E., INSTRUCTIONS, THAT MAKE THE HARDW ARE WORK. SOFTWARE IS BROADLY OF TWO TYPES, I.E., THE SYSTEMS SOFTWARE, WHICH IS ALSO KNOWN AS THE OPERATING SYSTEM WHICH C ONTROLS THE WORKING OF THE COMPUTER; WHILE THE OTHER BEING APPL ICATIONS SUCH AS WORD PROCESSING PROGRAMS, SPREAD SHEETS AND DATA BASE WHICH PERFORM THE TASKS FOR WHICH PEOPLE USE C OMPUTERS. BESIDES THESE THERE ARE TWO OTHER CATEGORIES OF SOF TWARE, THESE BEING: NETWORK SOFTWARE AND LANGUAGE SOFTWARE. THE NETWORK SOFTWARE ENABLES GROUPS OF COMPUTERS TO COMMUNICATE WITH EACH OTHER, WHILE LANGUAGE SOFTWARE PROVIDES WITH T OOLS ITA NO.4513/DEL/2014 11 REQUIRED TO WRITE PROGRAMMES. (SEE MICROSOFT COMPUT ER DICTIONARY, 5TH EDITION SOFTWARE AT PAGE 489). 12. THE AFORESAID WOULD SHOW THAT WHAT THE ASSESSEE ACQUIRED THROUGH ARTHUR ANDERSON AND ASSOCIATES WAS AN APPLI CATION SOFTWARE WHICH, ENABLED IT TO EXECUTE TASKS IN THE FIELD OF ACCOUNTING, PURCHASES AND INVENTORY MAINTENANCE. TH E FACT THAT THE APPLICATION SOFTWARE WOULD HAVE TO BE UPDATED F ROM TIME TO TIME BASED ON THE REQUIREMENTS OF THE ASSESSEE IN T HE CONTEXT OF THE ADVANCEMENT OF ITS BUSINESS AND/OR ITS DIVERSIF ICATION, IF ANY; THE CHANGES BROUGHT ABOUT DUE TO STATUTORY AME NDMENTS BY LAW OR BY PROFESSIONAL BODIES LIKE THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA, WHICH ARE GIVEN THE RESPONSIB ILITY OF CONCEIVING AND FORMULATING THE ACCOUNTING STANDARDS FROM TIME TO TIME, AND PERHAPS ALSO, BY REASON OF THE FACT TH AT EXPENSES MAY HAVE TO BE INCURRED ON ACCOUNT OF CORRUPTION OF THE SOFTWARE DUE TO UNINTENDED OR INTENDED INGRESS INTO THE SYSTEM OUGHT NOT GIVE A COLOUR TO THE EXPENDITURE INCURR ED AS ONE EXPENDED ON CAPITAL ACCOUNT. GIVEN THE FACT THAT TH ERE ARE MYRIAD FACTORS WHICH MAY CALL FOR EXPENSES TO BE IN CURRED IN THE FIELD OF SOFTWARE APPLICATIONS, IT CANNOT BE SA ID THAT EITHER THE EXTENT OF THE EXPENSE OR THE EXPENSE BEING INCU RRED IN CLOSE PROXIMITY, IN THE SUBSEQUENT YEARS, WOULD BE CONCLU SIVELY DETERMINATIVE OF ITS NATURE. THE ASSESSING OFFICER HAS, IN OUR VIEW, ERRED PRECISELY FOR THESE VERY REASONS. 13. BEFORE WE CONCLUDE, WE MAY ALSO DEAL WITH THE O NE LAST ISSUE RAISED BY THE LEARNED COUNSEL FOR THE REVENUE WHICH IS THAT IN THE BOOKS OF ACCOUNTS, THE ASSESSEE HAD NOT WRIT TEN OFF THE EXPENSE IN ISSUE, WHILE IN THE SUCCEEDING ASSESSMEN T YEAR ONLY A PART OF THE EXPENSE HAD BEEN WRITTEN OFF AND, THE REFORE, THE ASSESSEES OWN UNDERSTANDING OF THE NATURE OF THE E XPENSE INVOLVED WAS THAT IT WAS EXPENDED ON CAPITAL ACCOUN T. 13.1 THE AFORESAID SUBMISSION IS ONLY TO BE STATED TO BE REJECTED. THE REASON BEING: THAT THE TREATMENT OF A PARTICULAR EXPENSE OR, A PROVISION IN THE BOOKS OF ACCOUNTS CA N NEVER BE CONCLUSIVELY DETERMINATIVE OF THE NATURE OF THE EXP ENSE. AN ASSESSEE CANNOT BE DENIED A CLAIM FOR DEDUCTION WHI CH IS ITA NO.4513/DEL/2014 12 OTHERWISE TENABLE IN LAW ON THE GROUND THAT THE ASS ESSEE HAD TREATED IT DIFFERENTLY IN ITS BOOKS. THE OBSERVATIO N OF THE SUPREME COURT IN THE CASE OF KEDAR NATH JUTE MANUFA CTURING CO. LTD. VS CIT (1971) 82 ITR 363 PUTS THIS BEYOND DOUBT. THE RELEVANT OBSERVATIONS OF THE SUPREME COURT ON THIS ASPECT OF THE MATTER ARE EXTRACTED HEREINBELOW: WHETHER THE ASSESSEE IS ENTITLED TO A PARTICULAR DEDUCTION OR NOT WILL DEPEND ON THE PROVISION OF LAW RELATING THERETO AND NOT ON THE VIEW WHICH THE ASSESSEE MIGHT TAKE OF HI S RIGHTS NOR CAN THE EXISTENCE OR ABSENCE OF ENTRIES IN THE BOOK S OF ACCOUNTS BE DECISIVE OR CONCLUSIVE IN THE MATTER.. 13.2 THEREFORE, THE AFORESAID CONTENTION IS OF NO A VAIL TO THE REVENUE. 14. FOR THE FOREGOING REASONS, WE ARE OF THE VIEW T HAT THE QUESTIONS OF LAW FOR EACH OF THE AFOREMENTIONED ASS ESSMENT YEARS HAVE TO BE ANSWERED IN THE AFFIRMATIVE AND IN FAVOUR OF THE ASSESSEE. RESULTANTLY, THE AFOREMENTIONED APPEA LS ARE DISMISSED. 7.3 IN VIEW OF ABOVE, WE ARE OF THE CONSIDERED VIE W THAT ABOVE ISSUE IS EXACTLY THE SIMILAR TO THE ISSUE INVOLVE D IN THE PRESENT APPEAL AND COVERED BY THE AFORESAID DECISION. HENCE, RES PECTFULLY FOLLOWING THE ABOVE PRECEDENT, WE DECIDE THE ISSUE IN DISPUTE IN FAVOR OF THE ASSESSEE AND AGAINST THE REVENUE. 8. WE FIND THAT SIMILAR PAYMENT HAS BEEN MADE IN TH E PRESENT YEAR ALSO THEREFORE, RESPECTFULLY FOLLOWING THE EARLIER ORDER ON SIMILAR ADDITION WE DISMISS GROUND NO.2 OF REVENUES APPEAL. 9. AS REGARDS GROUND NO.3 IN RESPECT OF ADDITION U/ S 14A AND LD. CIT(A) DELETED THE SAME BY HOLDING AS UNDER: 5. REGARDING THE GROUND NO.5 RELATING TO DISALLOWA NCE OF RS. 5,070 UNDER SECTION 14A OF THE ACT, THE LD AR WAS AGGRIEV ED THAT THE AO MADE THE DISALLOWANCE WITHOUT APPRECIATING THAT NEI THER ANY EXPENDITURE WAS INCURRED (ON EXEMPT INCOME) NOR ANY EXEMPT INCOME ITA NO.4513/DEL/2014 13 WAS RECEIVED DURING THE YEAR. THE LD COUNSEL SUBMIT TED THAT THE APPELLANT HAD ACQUIRED SHARES OF EICHER MOTORS LIMI TED ON 24 MARCH 2008 RELATING TO AY 2008-09, WHICH STOOD AT RS. 9,4 6,080 IN THE SCHEDULE 5 OF THE FINANCIAL STATEMENTS OF THE YEAR UNDER APPEAL. IN THIS REGARD, IT WAS SUBMITTED THAT THE APPELLANT NEITHER BORROWED ANY LOAN NOR DID RECEIVE ANY DIVIDEND INCOME DURING THE SUBJ ECT YEAR. 5.2 IT WAS ALSO INFORMED THAT DURING THE ASSESSMENT PROCEEDINGS, THE APPELLANT WAS ASKED TO FURNISH THE DETAILS OF EXPEN DITURE INCURRED FOR EARNING EXEMPT INCOME. IN RESPONSE, VIDE SUBMISSION DATED 28 MARCH 2013, IT WAS SUBMITTED THAT PROVISIONS OF SECTION 1 4A OF THE ACT WERE INAPPLICABLE IN THE PRESENT CASE, SINCE NEITHER ANY EXPENDITURE WAS INCURRED BY THE APPELLANT TO EARN EXEMPT INCOME IN THE YEAR AND NOR WAS ANY LOAN TAKEN DURING THE YEAR. HOWEVER, THE LD . AO DISREGARDED THE SUBMISSION MADE BY THE APPELLANT AND PROCEEDED TO DISALLOW RS.5,070 BEING 0.5% OF AVERAGE VALUE OF THE INVESTM ENT BY VIRTUE OF RULE 8D(2)(II)(C) OF THE RULES WITHOUT RECORDING AN Y COGENT REASONS. 5.3 THE LD AR SUBMITTED THAT BEFORE INVOKING THE PR OVISIONS OF RULE 8D, THE LD.AO FAILED TO RECORD COGENT REASONS WITH REGARD TO THE ACCOUNT OF THE APPELLANT. THE LD AR REFERRED TO RUL INGS OF VARIOUS COURTS, IN WHICH IT HAS BEEN HELD THAT IT IS A MAND ATE FOR THE ASSESSING OFFICER TO RECORD HIS SATISFACTION WITH REGARD TO T HE ACCOUNTS OF THE ASSESSEE. IN THIS REGARD, RELIANCE WAS PLACED ON TH E DECISION OF HON'BLE ITAT OF KOLKATA IN THE CASE OF REI AGRO V D CIT [TS-271- ITAT-2013(KOL)]. IN VIEW OF THE ABOVE, IT WAS SUBMI TTED THAT DISALLOWANCE OF RS. 5,070/- MAY BE DELETED IN THE A BSENCE OF THE SATISFACTION RECORDED BY THE LD.AD WITH REGARD TO T HE ACCOUNT OF THE APPELLANT. 10. WE FIND THAT IN PRESENT YEAR NO EXPENDITURE IN THE FORM OF INTEREST ON OTHER EXPENDITURE FOR EARNING OF EXEMPT INCOME WAS POINTED OUT BY A.O. IT IS AN ESTABLISHED LAW THAT FOR MAKING DISALLOWANCE U/S 14A FINDING OF FACT WITH RESPECT TO INCURRING OF EXPENDITURE IS A PRE-R EQUISITE WHICH HAS NOT BEEN DONE IN THIS CASE. WE FIND THAT LD. CIT(A)S FINDI NG ARE EXHAUSTIVE AND DETAILED AND WE DO NOT FIND ANY INFIRMITY IN THE SA ME. ITA NO.4513/DEL/2014 14 11. AS REGARDS GROUND NO.4, LD. CIT(A) HAS DEALT TH E ISSUE IN DETAIL AND HAS DECIDED THE ISSUE IN FAVOUR OF ASSESSEE BY HOLD ING AS UNDER: 7.4 REGARDING THE GROUND NO.4 RELATING TO REPAIR A ND MAINTENANCE EXPENDITURE, I FIND THAT OUT OF AN AMOUNT OF RS.1.0 2 CRORES DISALLOWED BY THE AO, AN AMOUNT OF RS.37,83,139/- PERTAINS TO REPAIR AND LABOUR CHARGES AND FURTHER AN AMOUNT OF RS.64,88,659/- PER TAINS TO REPLACEMENT OF SPARE PARTS. THE CONTENTION OF THE A PPELLANT THAT THE APPELLANT HAD ALREADY CAPITALIZED RS.11.87 CRORES I S ALSO EVIDENT BY THE TAX AUDIT REPORT, WHICH WAS PLACED ON RECORD DU RING THE PROCEEDINGS. I OBSERVE THAT THE AO DESIRED FURTHER INFORMATION REGARDING REPAIR AND REPLACEMENT EXPENDITURE IN A F ORMAT SPANNING 26 COLUMNS. IN RESPONSE TO THIS, THE APPELLANT HAD FURNISHED NECESSARY DETAILS EXCEPT THAT 1-2 COLUMNS WERE NOT FILLED UP ON THE GROUND THAT SUCH INFORMATION IS NOT MAINTAINED. THE APPELLANT H AD ALSO FURNISHED RELEVANT BILLS/INVOICES. HOWEVER, THE AO TOOK AN AD VERSE VIEW OF THE FACT OF APPELLANT NOT HAVING PROVIDED INFORMATION O N 1-2 COLUMNS. IN MY VIEW THE AD COULD HAVE BEEN MORE JUDICIOUS AND E XAMINED THE ISSUES ON MERIT IN THE LIGHT OF EVIDENCES PLACED BE FORE HIM INCLUDING BILLS/INVOICES. SUCH AN INFORMATION IS NOT A STATUT ORY REQUIREMENT FOR ALLOWING CLAIM OF REPAIR & MAINTENANCE EXPENSES. I FIND THAT THE AFORESAID EXPENDITURE WAS INCURRED TO PRESERVE AND MAINTAIN THE EXISTING MACHINERY, WHICH WAS MALFUNCTIONING AND TH US DEMANDED REPAIRS/REPLACEMENT TO BRING THE EFFICIENCY OF THE MACHINE, TO THE LEVEL OF ORIGINAL PERFORMANCE AND NO NEW ADVANTAGE OR ASS ETS CAN BE HELD TO HAVE COME INTO EXISTENCE AS A RESULT OF SUCH EXP ENDITURE. ON PERUSAL OF THE DETAILS OF THE SPARE PARTS REPLACED ALONG WITH THEIR COST, THE COST OF MOTHER EQUIPMENTS IN WHICH SUCH SPARE P ARTS WERE USED, AND THE EFFECT ON REDUCTION CAPACITY, I HOLD THAT T HE EXPENSES FOR REPAIR/REPLACEMENT WERE IN THE NATURE OF 'CURRENT R EPAIRS' ALLOWABLE U/S 31(I). IN HOLDING SO, I DRAW SUPPORT FROM THE D ECISIONS IN THE CASES OF CIT VS CHOWGULE & CO. (P) LTD. (SUPRA), NEW SHOR ROCK SPINNING AND MANUFACTURING CO. LTD. V. CIT [SUPRA], IN WHICH IT WAS HELD THAT RESTORING THE FUNCTIONAL EFFICIENCY BY REMOVING THE DEFECT ONLY PREVENTS LOSS AND DOES NOT CREATE ANY NEW ASSET. IN VIEW OF THE SAME, IT CANNOT BE SAID THAT THE EXPENDITURE INCURRED BY APPELLANT WAS CAPITAL IN NATURE WHICH IS HELD TO BE AN ALLOWABLE REVENUE EXPENDITURE U/S 31{I) OF THE IT ACT. ACCORDINGLY, THIS GROUND O F APPEAL IS ALLOWED IN FAVOUR OF APPELLANT. ITA NO.4513/DEL/2014 15 12. WE FIND THAT LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION. THE ASSESSEE HAD FILED NECESSARY DETAILS REGARDING REPA IR & MAINTENANCE AND HAD SUBMITTED COMPLETE BREAK-UP OF SPARE PARTS AND LABO UR CHARGES. THE NON FURNISHING OF INFORMATION IN 1-2 COLUMNS OUT OF 26 COLUMNS CANNOT BE AGROUND FOR DISALLOWANCE OF THE CLAIM ESPECIALLY IN VIEW OF THE FACT THAT SUCH INFORMATION WAS NOT STATUTORY INFORMATION. THE ITE MS WHICH REQUIRED CAPITALIZATION WERE ALREADY CAPITALIZED BY ASSESSEE AND, THEREFORE, LD. CIT(A) HAS RIGHTLY DELETED THE SAME AND WE DO NOT F IND ANY INFIRMITY IN THE ORDER OF LD. CIT(A). IN VIEW OF ABOVE, GROUND NO.4 IS ALSO DISMISSED. 13. IN VIEW OF ABOVE, APPEAL FILED BY REVENUE IS DI SMISSED. 14. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH MAY, 2015. SD./- SD./- ( G. C. GUPTA) (T.S. KAPOO R) VICE PRESIDENT ACCOUNTANT MEMBER DATE: 27 TH MAY, 2015 SP COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). ITA NO.4513/DEL/2014 16 S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 21/5 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 21,25,26, SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 2015 JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 5 AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS 27 SR. PS/PS 6 KEPT FOR PRONOUNCEMENT 27/5 SR. PS/PS 7 FILE SENT TO BENCH CLERK 27/5 SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER