2014 (7) TMI 1099

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....ness to introduce, develop, promote and market services, packages and products relating to e-commerce, communication and realise consultancy income thereof. For the year under consideration, the main source of the company was through rendering consultancy services related to logistic commerce, communication information, education, entertainment technologies and other services related thereto. The assessee has shown nil receipt for the year under consideration. However, it has debited expenses against the consultancy services of Rs. 1,43,62,884, out of which, expenses of Rs. 1,25,49,302 were on account of portal and web charges. The Assessing Officer disallowed whole of these portal and web charges and also disallowed depreciation of Rs. 44,....

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....is covered in favour of the assessee by the decision of the hon'ble jurisdictional High Court in the case of CIT v. Indian Visit.com (P.) Ltd. [2009] 176 Taxman 164 (Delhi). The facts of the assessee's case are similar, therefore, this decision is applicable to the assessee's case also. 4. We have heard both sides on the issue. The hon'ble Delhi High Court in the case of CIT v. Indian Visit.com (P.) Ltd. [2009] 176 Taxman 164 (Delhi) has held that expenditure incurred on the development of web and portal charges are definitely revenue expenditure. The hon'ble Delhi High Court has considered the decision of the hon'ble Supreme Court in the case of Alembic Chemical Works Co.Ltd. v. CIT [1989] 177 ITR 377 wherein the....

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....sites enable companies to do what the printed brochures did but, in a much more efficient manner as well as in a much shorter period of time and covering a much larger set of people worldwide." 5. Considering the facts of the case in the light of the hon'ble jurisdictional High Court's decision, we dismiss this ground of the Revenue's appeal. 6. In ground No. 2, the issue involved is deleting the addition made on account of not allowing depreciation of Rs. 44,324. The Assessing Officer disallowed the depreciation by holding that no business was carried out. The Commissioner of Income-tax (Appeals) allowed the appeal of the assessee by holding that the assessee was carrying on the business. Therefore, there is no question o....