THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR
I.T.T.A.No.718 of 2014
DATED:23.12.2014 Between:
Commissioner of Income Tax-III, Hyderabad.
… Appellant And M/s.Social Media India Ltd., Hyderabad.
….Respondent THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR
I.T.T.A.No.718 of 2014
Judgment: (per the Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta)
This appeal is sought to be preferred and admitted against the judgment and order of the learned Tribunal dated 28.5.2014 by the Revenue in relation to the assessment year 2009-2010 on the following suggested questions of law:
1. In the facts and circumstances of the case, whether the Hon’ble Tribunal (ITAT) is correct in law in directing the Assessing Officer to allow the Security Deposits and earnest money deposits for obtaining the advertisement business which was subsequently written off treating the same as Revenue Expenditure, when the said amounts are liable to be disallowed ?
2. In the facts and circumstances of the case, whether the Hon’ble Tribunal (ITAT) is correct in law in holding that no asset has been created without appreciating that the amount utilized for space for advertisement is for ‘profit making asset’ which is enduring in nature and thereby the expenditure thereon is capital expenditure ?
3. In the facts and circumstances of the case, whether the Hon’ble Tribunal (ITAT) is correct in law in treating the rental deposits made for setting of ‘Study Abroad Centres’ as revenue expenditure without appreciating that the advances are towards acquiring business asset, the benefit from which is enduring in nature ?
4. In the facts and circumstances of the case, whether the Hon’ble Tribunal (ITAT) is correct in law in setting aside the issue of allowability of advance paid to M/s. Shreya Broadcasting Corporation towards advertising contract, although it constitutes a Capital loss ?
5. In the facts and circumstances of the case, whether the Hon’ble Tribunal (ITAT) is correct in law in directing the Assessing Officer to treat the loss of advance as revenue in nature, while the same constitutes a capital loss ?
Out of five (5) questions, the last two questions, namely, questions 4 and 5 are not pressed by Mr. B. Narasimha Sarma. He would only argue in relation to question Nos. 1,2 and 3.
So far as question Nos. 1 and 2 are concerned, they can be dealt with by us. After reading the judgment of the learned Tribunal, it appears, on appreciation of fact, the learned Tribunal found that the revenue loss incurred in connection with carrying on business, cannot be termed to be capital. The learned Tribunal, on appreciation of fact, has granted the relief. We do not want to interfere with the same as no question of law is involved.
As far as question No.3 is concerned, nothing has been decided by the learned Tribunal as it has only remitted the matter for fresh decision.
Hence, we dismiss the appeal. No order as to costs.
K.J. SENGUPTA, CJ SANJAY KUMAR, J 23rd December, 2014 Pnb