Document Fragment View

Matching Fragments

lll. CLAIM FOR DEDUCTION IN RESPECT OF DATA ACCESS FEES TREATED AS DEFERRED REVENUE EXPENDITURE IN THE ACCOUNTS: Rs. 88,70,985/- On the facts and in the circumstances of the case and in law, the Commissioner of Income-tax (Appeals) erred in restricting the claim for deduction in respect of Data Access Fees to Rs 17,74, 197/- as debited in the Profit and Loss Account being 1/5th of the total expenditure amounting to Rs.88,70,985/- instead of allowing the entire expenditure of Rs.88,70,985/- incurred during the year CO no. 257/MUM/2006 M/s. United Phosphorus Ltd.

4. The revenue in its Cross appeal in ITA No. 1822/Mum/2006 has raised following grounds of appeal:

" 1. On the facts and in the circumstances of the case and in law, the ld. CIT(A) was not correct in deleting the additions by treating Product Registration expenses of Rs 20,07,684/-and Research & Development expenses of Rs.3,05,38,830/- as revenue in nature.
2. On the facts and in the circumstances of the case and in law, the ld. CIT(A) was not correct in directing the AO to allow 1/5 of Rs 88,70,985/- by treating Data Access Fees as revenue expenditure.

14. Ground no. 3 relates to allowing deduction of 1/5 of data access fee treated as differed revenue expenditure. The Revenue has also challenged the action of ld. CIT(A) in allowing 1/5th of data access fee. The ld AR of the assessee submits CO no. 257/MUM/2006 M/s. United Phosphorus Ltd.

that notes in respect of amount treated as deferred revenue expenses was given in the accounts. The details of such deferred revenue expenses were also furnished during assessment. Such expenses were incurred for the purpose of registration of product in other country to enable the assessee to export to those countries. Thus, such expenditure ought to be allowed as deduction under section 37 of the Act. This ground of appeal as well as ground no. 2 in Revenue's appeal is also covered in favour of the assessee by the decisions of Tribunal in assesses own case for AY 1999-00 in ITA No. 4695/Mum/2005 and in AY 2000-

III. CLAIM FOR DEDUCTION IN RESPECT OF DATA ACCESS FEES TREATED AS DEFERRED REVENUE EXPENDITURE IN THE ACCOUNTS: Rs 172,935,565. On the facts and in the circumstances of the case and in law, the Commissioner of Income-tax (Appeals) erred in restricting the claim for deduction in respect of Data Access Fees to Rs 34,587,113 as debited in the Profit and Loss Account being 1/5th CO no. 257/MUM/2006 M/s. United Phosphorus Ltd.