2009 (4) TMI 943

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....velopment for its international affiliates and supplying it to end-users in the Indian sub-continent and Gulf area. In the course of its business it had incurred a sum of Rs. 2,48,02,664 on legal and professional expenses out of which the an amount of Rs. 10,64,500 was treated as capital expenditure. The details of which are as follows: S. No. Name Narration Amount(Rs.) (a) Neural Softech Pvt. Ltd. Consultancy charges for preparing feasibility study on software projects. 5,03,200 (b) Info Edge (India) Pvt. Ltd. Access of Database for three months 21,600 (c) Sharma Arun and Co. CA charges or STPI Approval and Green Card 74,000 (d) Laxmi and Associates Brokerage charges for arranging of....

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.....Counsel for the assessee, on other hand, supported the order of the CIT(A) and submitted that no asset was acquired by incurring these expenditure and there was no scope of enduring benefit as well. 7. We have heard the parties and considered the rival submissions. The consultancy charges were paid to M/s Neural Softech Pvt. Ltd. for preparing the feasibility study on the software which is an integral part of regular business activity of the company. It was incurred to better understand the technical and economic aspect of the project as to give best quality to the customer. It was a sort of recurring expenditure and was seen in the context of the volume of business carrying on by the assessee whose gross turnover was Rs. 54,22,04,240. ....

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....nd marketing cost with the parent company in USA. The company has also incurred a total amount of Rs. 64,800. It comprises of payment to M/s QSYS Constants for implementing ISO 9001: 2000 based Quality Management System as the major part of the amount was paid for professional fee to M/s QSYS. In this connection, reliance was placed on various decisions of the Hon'ble High Court in which it has been that any expenditure which improves efficiency and does not lead to any additional asset is a revenue expenditure. Therefore, this expenditure, in our opinion, cannot be treated as capital expenditure. The consultancy charges of Rs. 75,000 were paid to Design and Development for planning, designing the interiors for Gurgaon office, a leased ....