2018 (11) TMI 1988

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.... appeal of the Revenue is against the order of the learned CIT(A) deleting the addition made by the Assessing Officer holding that expenditure on account of implementing "Project Eagle" as revenue expenditure. For this Revenue has raised following ground No. 1:- "1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in directing the Assessing Officer to treat the expenditure of Rs. 7,00,000/- on account of implementing 'Project Eagle' as revenue expenditure without appreciating the fact that implementation of the said project has enduring benefit to the assessee and deserves to be treated as capital expenditure. 3. At the outset, learned counsel for the assessee filed copy of the Trib....

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....made by the Assessing Officer. 5. We have gone through the facts of present year and find that the facts are exactly identical in regard of implementation of "project eagle" and expenses on this was treated by the Assessing Officer and the learned CIT(A) as capital in nature. But the Tribunal in A.Y. 2010-11 has treated as Revenue in nature. Respectfully following the Tribunal decision, we are of the view that the learned CIT(A) has rightly deleted the addition and we confirm the same. On this issue of Revenue appeal is dismissed. 6. Next issue in this appeal of the Revenue is against the order of the learned CIT(A) deleting the disallowance of legal and professional fees paid to Shri Ajit Gujral amounting to 64,33,162/-. For this the....

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....ompany." Holding the services provided as "enduring nature" the Assessing Officer has disallowed the amount u/s. 37(1) of the Act. 5.5.2 It is noted that in the course of assessment proceedings, the appellant had filed copies of appointment letter of Shri Ajit Gujral as Adviser agribusiness and notarised Engagement Agreement between the two parties. Perusal of the appointment letter reveals that Shri Gujral was appointed to offer advisory on the companies strategic intent and to develop new business opportunity and related consultancy work. The Engagement Agreement also reveals that the appellant's "desirous of engaging the services of a competent Adviser for rendering advisory services to design and execute these Business Plan....

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....armers and to identify new opportunity in the agro-chemical space, it hired a consultant Shri Ajit Gujral. Shri Ajit Gujral was given job to devise strategies to take the agribusiness forward. In this direction Shri Ajit Gujral carried out research on account of agro services, which are integral part of assessee's business and also aids in developing synergistic competencies along with its pesticides business. As per annual report, share of revenue from non-pesticides business was only 10% of the total revenue and by connecting as aspiring increase the revenue there from, the company position to market its pesticides and seed products and also to identify customer's demand/need and to identify new opportunity, it has hired the services of S....