DCIT, CIRCLE-14(1)(2), MUMBAI vs. M/S EXPERIAN CREDIT INFORMATION COMPANY OF INDIA PRIVATE LIMITED, MUMBAI

This appeal by the Revenue is directed against order dated 07.02.2023 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2018-19 raising following grounds:

1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was right in allowing technology cost to the extent of Rs.6,45,73,278/- as revenue expenditure ignoring the fact that the assessee had incurred to set up technology and M/s Experian Credit Information Company of India M/s Experian Credit Information Company of India 2 Pvt. Ltd. ITA No. 1146/Mum/2023 platform which would help him in conducting the platform which would help him in conducting the platform which would help him in conducting the business in the future. business in the future.

2. The appellant prays that The appellant prays that the order of CIT(A) on the the order of CIT(A) on the above ground be set aside and that of the Assessing above ground be set aside and that of the Assessing above ground be set aside and that of the Assessing Officer be restored. Officer be restored.

Section 10 in The General Clauses Act, 1897 Section 10 in The General Clauses Act, 1897 10 Computation of time. 10 Computation of time. Where, by any 19 [Central Act] or Regulation made after the (1) Where, by any [Central Act] or Regulation made after the commencement of this Act, any act or proceeding is directed or allowed to be commencement of this Act, any act or proceeding is directed or allowed to be commencement of this Act, any act or proceeding is directed or allowed to be done or taken in any Court or office on a certain day or within a prescribed done or taken in any Court or office on a certain day or within a done or taken in any Court or office on a certain day or within a period, then, if the Court or office is closed on that day or the last day of the period, then, if the Court or office is closed on that day or the last day of the period, then, if the Court or office is closed on that day or the last day of the prescribed period, the act or proceeding shall be considered as done or taken prescribed period, the act or proceeding shall be considered as done or taken prescribed period, the act or proceeding shall be considered as done or taken in due time if it is done or taken on the next day afterwards on which the Court in due time if it is done or taken on the next day afterwards on which the Court in due time if it is done or taken on the next day afterwards on which the Court or office is open: Provided that nothing in this section shall apply to any act or ffice is open: Provided that nothing in this section shall apply to any act or ffice is open: Provided that nothing in this section shall apply to any act or proceeding to which the Indian Limitation Act, 1877 (15 of 1877) 20 , applies. proceeding to which the Indian Limitation Act, 1877 (15 of 1877) proceeding to which the Indian Limitation Act, 1877 (15 of 1877) This section applies also to all 19 [Central Acts] and Regulations made on (2) This section applies also to all l Acts] and Regulations made on or after the fourteenth day of January, 1887. or after the fourteenth day of January, 1887. 2.1 In the view of the submission of the Ld. In the view of the submission of the Ld. DR, there is no delay DR, there is no delay in filing the appeal and accordingly the in filing the appeal and accordingly the appeal is admitted. appeal is admitted.

2.2 We further note that despite notifying for the further note that despite notifying for the hearing neither anyone attended on behalf of the assessee nor any adjournment anyone attended on behalf of the assessee nor any adjournment anyone attended on behalf of the assessee nor any adjournment was sought, therefore therefore the appeal is heard ex-parte qua the assessee parte qua the assessee after hearing the arguments of the Ld. DR. after hearing the arguments of the Ld. DR.

M/s Experian Credit Information Company of India M/s Experian Credit Information Company of India 3 Pvt. Ltd. ITA No. 1146/Mum/2023

3.1 However, the Ld. CIT(A) deleted the addition following the However, the Ld. CIT(A) deleted the addition following the However, the Ld. CIT(A) deleted the addition following the finding of the Tribuna finding of the Tribunal in earlier years in the case of the assessee. l in earlier years in the case of the assessee. The relevant finding of the The relevant finding of the ld CIT(A) is reproduced as under: is reproduced as under:

“9. Ground of Appeal

No. 2 Ground of Appeal No. 2 – Holding Technology cost of Holding Technology cost of Rs.16,44,33,196/ Rs.16,44,33,196/- as capital expenditure and making addition as capital expenditure and making addition of Rs.6,45,73,278/ of Rs.6,45,73,278/- after allowing depreciation. Appellant debited Rs. 16,44,33, 196/ Appellant debited Rs. 16,44,33, 196/- in P & L Account in P & L Account as'Technology Cost' whose details are as'Technology Cost' whose details are tabulated in para 4 of tabulated in para 4 of assessment order. AO held this as capital expenditure and assessment order. AO held this as capital expenditure and assessment order. AO held this as capital expenditure and disallowed the same after allowing depreciation @ 60% due to disallowed the same after allowing depreciation @ 60% due to disallowed the same after allowing depreciation @ 60% due to following reasons. Benefit of this cost benefits for long period of following reasons. Benefit of this cost benefits for long period of following reasons. Benefit of this cost benefits for long period of time. Hence, after allowing depreciation of Rs time. Hence, after allowing depreciation of Rs. 9,68,59,918 the . 9,68,59,918 the AO made disallowance of Rs. 6,45,73,2781 AO made disallowance of Rs. 6,45,73,2781-holding it a "Capital holding it a "Capital in Nature". b)Appellant b)Appellant b)Appellant contended contended contended that that that identical identical identical issue issue issue of of of holding holding holding TechnologyCost as Capital Expenditure was decided in favour of TechnologyCost as Capital Expenditure was decided in favour of TechnologyCost as Capital Expenditure was decided in favour of Appellant by CIT(A)'s in cases of Appellant fr Appellant by CIT(A)'s in cases of Appellant from AY 2011 om AY 2011-12 to AY 2017-18. The details of orders of CIT(A) 's in cases of 18. The details of orders of CIT(A) 's in cases of 18. The details of orders of CIT(A) 's in cases of Appellant is as under: Appellant is as under:- AY Date of Order Date of Order Appeal No. Reference to relevant para Reference to relevant para 2011-12 14 October 2016 14 October 2016 CIT(A)-8/IT-594/14-15 Para 5.3.1 to 5.3.2 on page Para 5.3.1 to 5.3.2 on page 54-55 2012-13 4 May 2018 4 May 2018 CIT(A) 22, Para 5.4 on page 16 Para 5.4 on page 16 Mumbai/10268/2016-17 2013-14 4 May 2018 4 May 2018 CIT(A) 22, Para 5.4 on page 17 Para 5.4 on page 17 Mumbai/210281/2016-17 2014-15 4 May 2018 4 May 2018 CIT(A) 22, Para 5.4 on page 17 Para 5.4 on page 17 Mumbai/10861/2016-17 2017-18 29 April 2022 29 April 2022 National Faceless Appeal Para 7.3 on page 12 Para 7.3 on page 12 Centre

M/s Experian Credit Information Company of India M/s Experian Credit Information Company of India 4 Pvt. Ltd. ITA No. 1146/Mum/2023 c)Further, the Appellant stated that Hon'ble ITAT Mumbai upheld )Further, the Appellant stated that Hon'ble ITAT Mumbai upheld )Further, the Appellant stated that Hon'ble ITAT Mumbai upheld the orders of CIT(A) and allowed deduction of "Technology Cost" the orders of CIT(A) and allowed deduction of "Technology Cost" the orders of CIT(A) and allowed deduction of "Technology Cost" as recurring in nature and does not result in generation of any as recurring in nature and does not result in generation of any as recurring in nature and does not result in generation of any new asset or any right of permanent nature new asset or any right of permanent nature in cases of Appellant in cases of Appellant for AY 2011 for AY 2011-12 to AY2014-15 in ITA's No. 805, 4711 to 15 in ITA's No. 805, 4711 to 4713/Mum/2017 and 2018 vide order dated 02.08.2021. The 4713/Mum/2017 and 2018 vide order dated 02.08.2021. The 4713/Mum/2017 and 2018 vide order dated 02.08.2021. The relevant part of judgement of Hon'ble ITAT is asunder: relevant part of judgement of Hon'ble ITAT is asunder: relevant part of judgement of Hon'ble ITAT is asunder:- "14. We have heard both the parties and perused the "14. We have heard both the parties and perused the "14. We have heard both the parties and perused the records. We find records. We find that the issue here is whether the that the issue here is whether the assessee's claim of technology recharge cost is revenue assessee's claim of technology recharge cost is revenue assessee's claim of technology recharge cost is revenue expenditure or capital expenditure. The order of the expenditure or capital expenditure. The order of the expenditure or capital expenditure. The order of the Assessing Officer is again thoroughly based upon Assessing Officer is again thoroughly based upon Assessing Officer is again thoroughly based upon surmises surmises surmises and and and conjecture conjecture conjecture with with with no no no cogent cogent cogent material material material whatsoever. Th whatsoever. The opinion of the Assessing Officer that cost e opinion of the Assessing Officer that cost and expenses are incurred not to earn income during the and expenses are incurred not to earn income during the and expenses are incurred not to earn income during the year but continue to provide benefit over a period of years year but continue to provide benefit over a period of years year but continue to provide benefit over a period of years is totally a surmises and conjecture. Moreover, in tax laws is totally a surmises and conjecture. Moreover, in tax laws is totally a surmises and conjecture. Moreover, in tax laws there there there is is is no no no concept concept concept of of of deferred deferred deferred revenue rev rev expenditure.Moreover, we are of the opinion that the expenditure.Moreover, we are of the opinion that the expenditure.Moreover, we are of the opinion that the Assessing Officer has not brought on record any cogent Assessing Officer has not brought on record any cogent Assessing Officer has not brought on record any cogent material how these items are in capital in nature. On the material how these items are in capital in nature. On the material how these items are in capital in nature. On the other hand learned CIT(A) has analysed expenditure in other hand learned CIT(A) has analysed expenditure in other hand learned CIT(A) has analysed expenditure in detail and has found that these detail and has found that these expenses are basically expenses are basically revenue in nature and they should not be treated as revenue in nature and they should not be treated as revenue in nature and they should not be treated as capital expenditure. Here we note that learned CIT(A) was capital expenditure. Here we note that learned CIT(A) was capital expenditure. Here we note that learned CIT(A) was rightly referred to the decision of Hon'ble Supreme Court in rightly referred to the decision of Hon'ble Supreme Court in rightly referred to the decision of Hon'ble Supreme Court in the case of Empire Jute Co. Ltd. (124 ITR 1). It may be the case of Empire Jute Co. Ltd. (124 ITR 1). It may be the case of Empire Jute Co. Ltd. (124 ITR 1). It may be gainful to refer to the exposition in the case of Empire Jute ul to refer to the exposition in the case of Empire Jute ul to refer to the exposition in the case of Empire Jute Co. Ltd. (supra) wherein it was observed that "there may Co. Ltd. (supra) wherein it was observed that "there may Co. Ltd. (supra) wherein it was observed that "there may be cases where expenditure, even if incurred for obtaining be cases where expenditure, even if incurred for obtaining be cases where expenditure, even if incurred for obtaining an advantage of enduring benefit, may, none the less, be an advantage of enduring benefit, may, none the less, be an advantage of enduring benefit, may, none the less, be on revenue account and the on revenue account and the test of enduring benefit may test of enduring benefit may break down. It is not every advantage of enduring nature break down. It is not every advantage of enduring nature break down. It is not every advantage of enduring nature acquired by an assessee that brings the case within the acquired by an assessee that brings the case within the acquired by an assessee that brings the case within the principles laid down in this test. What is material to principles laid down in this test. What is material to principles laid down in this test. What is material to consider is the nature of the advantage in a commercial consider is the nature of the advantage in a commercial consider is the nature of the advantage in a commercial senseand it is only where the advantage is in the capital and it is only where the advantage is in the capital and it is only where the advantage is in the capital field that the expenditure would be disallowable on an field that the expenditure would be disallowable on an field that the expenditure would be disallowable on an application of this test. If the advantage consists merely in application of this test. If the advantage consists merely in application of this test. If the advantage consists merely in facilitating the assessee's trading operations or enabling facilitating the assessee's trading operations or enabling facilitating the assessee's trading operations or enabling the management and condu the management and conduct of the assessee's business ct of the assessee's business to be carried on more effectively or more profitably while to be carried on more effectively or more profitably while to be carried on more effectively or more profitably while

M/s Experian Credit Information Company of India M/s Experian Credit Information Company of India 5 Pvt. Ltd. ITA No. 1146/Mum/2023 leaving the fixed capital untouched, the expenditure would leaving the fixed capital untouched, the expenditure would leaving the fixed capital untouched, the expenditure would be on revenue account, even though the advantage may be on revenue account, even though the advantage may be on revenue account, even though the advantage may endure for an indefinite future. " On the touchstone of the endure for an indefinite future. " On the touchstone of endure for an indefinite future. " On the touchstone of above said Hon'ble Supreme Court decision and on the above said Hon'ble Supreme Court decision and on the above said Hon'ble Supreme Court decision and on the facts and circumstances of the case in our considered facts and circumstances of the case in our considered facts and circumstances of the case in our considered opinion learnedCIT(A) has taken correct view of the matter opinion learnedCIT(A) has taken correct view of the matter opinion learnedCIT(A) has taken correct view of the matter and it does not need any interference in our part. and it does not need any interference in our part. and it does not need any interference in our part. d)Respectfully following the above Respectfully following the above mentioned orders of CIT(A)'s mentioned orders of CIT(A)'s and Hon'ble Jurisdictional ITAT in Appellants case on an and Hon'ble Jurisdictional ITAT in Appellants case on an and Hon'ble Jurisdictional ITAT in Appellants case on an identical issue the Technology Cost is treated as Revenue identical issue the Technology Cost is treated as Revenue identical issue the Technology Cost is treated as Revenue Expenditure Expenditure Expenditure and and and is is is allowed allowed allowed deduction deduction deduction us us us 37 37 37 of of of Act. Act. Act. Addition/Disallowance made by the AO of Rs.6,45,73,278/ Addition/Disallowance made by the AO of Rs.6,45,73,278/ Addition/Disallowance made by the AO of Rs.6,45,73,278/- is hereby deleted. Grounds of Appeal

No. 2 is allowed. hereby deleted. Grounds of Appeal No. 2 is allowed. hereby deleted. Grounds of Appeal No. 2 is allowed.”

4. Since, the Ld. CIT(A) has follow Since, the Ld. CIT(A) has followeda binding precedent on the binding precedent on the issue in dispute in the case issue in dispute in the case of assessee itself, therefore of assessee itself, therefore, we do not find any error in the order the Ld. CIT(A) on the issue in dispute find any error in the order the Ld. CIT(A) on the issue in dispute find any error in the order the Ld. CIT(A) on the issue in dispute and accordingly, we uphold the same. The ground of appeal of the we uphold the same. The ground of appeal of the we uphold the same. The ground of appeal of the Revenue is accordingly Revenue is accordingly dismissed.

Order pronounced in the open Court on nounced in the open Court on 22/06/2023. /06/2023.