TaxTMI 
TaxTMI 
2015 (2) TMI 498
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....an intangible asset. 3. That the Commissioner of Income-tax (Appeals) erred on facts and in law in affirming the net disallowance of expenditure amounting to Rs. 88,85,332/- (net of depreciation on Rs. 1,01,54,665/-, on the alleged ground that incurrence of such expenditure had resulted in benefit of an 'enduring nature' to the appellant. 4. That the Commissioner of Income Tax (Appeals) erred on facts and in law in not appreciating that similar expenditure was being incurred by the appellant on a regular recurring basis for undertaking regular business transactions. 5. That the Commissioner of income Tax (Appeals) erred on facts and in law in concluding holding that the expenditure incurred by the appellant towards obtaining research report was with a view to expand extend its existing business operations. 6. Without prejudice, that the Commissioner of income Tax (Appeals) failed to appreciate that the entire exercise of seeking to disturb the year of allowability of expenditure is, in any case, revenue neutral. 7. That the Commissioner of Income Tax (Appeals) erred in confirming levy of interest under sections 234B and 234D of the Act." 3. The solitary is....
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....tailed break-up of invoices raised by M/s Zensar Technologies Ltd in the Assessment Year 2009-10 are given below:- Date of receipts report Invoice No. Invoice date Cost Service tax Total invoice Amount Oct 08 1891121 12/01/2009 666,470 82,376 748,846 November 08 1891122 12/01/2009 927,304 114,615 1,041,919 December 08 1891360 10/03/2009 1,759,143 217,430 1,976,573 January 09 1891361 10/03/2009 2,083,741 257,550 2,341,291 February 09 1900048 28/04/2009 1,888,658 227,602 2,116,260 March 09 1900049 28/04/2009 1,749,570 180,206 1,929,776 9,074,887 1,079,779 10,154,666 8....
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....ial Bank Tatweer, Shuaa Capital First Gulf Bank, Emirate NBD etc. And the remaining 68 reports were used by Business Advisory Division as a base for billing the existing clients. The Business Advisory Division team worked further on the reports so as to develop and bring them into marketable form for existing clients. Different levels of executives had to put in various hours so as to convert Zensar reports. The revenue generated as mentioned against each report also includes the revenue generated because of the efforts put in by Business Advisory Division team. It was pointed out by the ld AR that In some cases report were prepared for a specific purpose with no subsequent value like when report comprises of providing background study on the sector or specific segments /companies that were seen as growing at a fast pace. Reports obtained by Zensar cannot be taken as stock in trade for future trading purposes. 8. The benefit accruing out of these reports would not extend to any future period; hence the same cannot be construed as capital expenditure by the assessee company. 9. On the other hand the ld DR pointed to the reply of assessee at Page 122 wherein it is stated as bel....
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....ssessee in the year in which the unit had not started working was allowable as business expenditure. The Appellate Tribunal found that the management of the new unit and the earlier business were the same and there was unity of control and a common fund, and held that the manufacture of special alloy and billets was an expansion of the assessee's business and not a new business and allowed deductions of expenditure. The decision of the Tribunal was affirmed by the High Court holding that all the assessee's bid was to start manufacturing a new commodity. In the larger sense, the business of the assessee remained the same, viz. the business of manufacture. The assessee was already manufacturing diverse items and a new item was added to this business. The Tribunal had found that there was complete unity of control and that 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 arc 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 cour....