2021 (10) TMI 174

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....to the website and to enhance its existing products to keep its website updated. Respondent had spent substantial amounts on these projects under the head "capital work-in-progress". However, due to recession there was fall in revenue and respondent decided to conserve cash flow and after reevaluating all on going projects decided to pursue only those projects which were critical for the purpose of its business in short run. Respondent identified the projects which were critical and decided to abandon those projects which were not expected to pay back. Respondent abandoned some of the projects which were incomplete at that point of time and claimed expenses pertaining to such abandoned projects as revenue expenses. The expenditure incurred ....

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.... that CIT(A) misread the judgment of the Jharkhand High Court in the case of CIT Vs. Tata Robins Fraser Ltd. (2012) 78 DTR 22., the ITAT held that such expenses were allowable as revenue expenses. Paragraph 16 of Tata Robins Fraser Ltd. (Supra) reads as under:- "16......Substantially this is also a question of facts where an expenditure incurred by the assessee was of the revenue in nature or it was capital expenditure. However, in view of the fact that question has been framed and we have narrated the facts of the case including the breakup of the expenditure which includes the fee of Rs. 2,57,335/- paid to the Architect and some expenses of Rs. 46,379/- incurred on old capital work in progress which was abandoned and cost of dama....