Commissioner Of Income Tax vs Info Vergix Technologies Limited
2010 Latest Caselaw 126 Del

                THE HIGH COURT OF DELHI AT NEW DELHI

%                                    Judgment delivered on: 12.01.2010

+               ITA 613/2008


COMMISSIONER OF INCOME TAX                                ... Appellant


                                     - versus -


INFO VERGIX TECHNOLOGIES LIMITED                          ... Respondent

Advocates who appeared in this case:

For the Appellant       : Ms Prem Lata Bansal
For the Respondent      : None



CORAM:-
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE SIDDHARTH MRIDUL

1. Whether Reporters of local papers may be allowed to see the judgment ?

2. To be referred to the Reporter or not ?

3. Whether the judgment should be reported in Digest ?

BADAR DURREZ AHMED, J (ORAL)

1. This appeal is in respect of the assessment year 2001-02 and is

directed against the order of the Income-tax Appellate Tribunal dated

15.05.2007 in ITA No.1436/Del/2004. The assessee had shown expenditure

as deferred revenue expenditure in its books. However, it had claimed it as

revenue expenditure in its return. The Assessing Officer had disallowed the

same and the Commissioner of Income-tax (Appeals) had confirmed the

disallowance. The total extent of disallowance was Rs 31,54,846/-. The

Income-tax Appellate Tribunal has allowed the deduction on the ground

that, although the said sum had been shown differently in the books, the

same was allowable as per law.

2. The learned counsel for the revenue has pointed out

before us that the said sum of Rs 31,54,846/- comprised of two

components, a sum of Rs 8,19,365/-, which is said to be expenditure

incurred between the period 01.04.2000 to 30.05.2000 (pre-

commencement period) and a sum of Rs 23,35,481/- incurred after

30.05.2000. The assessee had three businesses-networking, call centre and

e-business activities. The learned counsel for the revenue pointed out

that as regards the expenditure of Rs 8,19,365/-, it was clearly incurred prior

to the date of commencement of any business activity of the assessee and,

accordingly, the same was in the nature of pre-operative expenses.

3. We have considered the submissions made by the learned

counsel for the appellant / revenue. Nobody has appeared on behalf of the

assessee, although the service was completed by means of substituted

service. Considering the decision of the Income-tax Appellate Tribunal and

the submissions made before us by the learned counsel for the revenue, we

are of the view that no interference whatsoever is called for with regard to

the expenses incurred after 30.05.2000 which are in the sum of Rs

23,35,481/-. But, with regard to the balance sum of Rs 8,19,365/-, which

are expenses for the pre-commencement period, we find that there is no

discussion with regard to this in the impugned order. However, we are not

inclined to interfere with the impugned order because the tax effect in

respect of the said expenditure of Rs 8,19,365/- would be less than Rs 4

lakhs.

The appeal stands disposed of accordingly.

BADAR DURREZ AHMED, J

SIDDHARTH MRIDUL, J JANUARY 12, 2010 dutt