THE COMMISSIONER OF INCOME TAX-IV vs. INFOGAIN INDIA BPO PVT. LTD

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

To be referred to the Reporter or not ?

Whether the judgment should be reported in Digest ? BADAR DURREZ AHMED, J (ORAL) CM 5207/2010

The Income Tax Appellate Tribunal had placed reliance on the decision of this Court in the case of CIT v. Microsoft Corporation of India Private Limited: ITA 111/2008 decided on 21.08.2008. This Court in the case of Microsoft Corporation (supra), inter alia, concluded that an expense would be allowed under Section 37(1) of the said Act if it is shown to have been commercially expedient and that commercial expediency must be viewed from the perspective of a prudent businessman and not from the point of view of the revenue. Considering the said decision, the Tribunal came to the conclusion that the settlement in the present case was also by way of commercial expediency and the amount was paid in terms thereof. The Tribunal particularly noted that, in fact, the assessee in the present case was in a better footing than in the case of Microsoft Corporation (supra) because the liability to pay the rent for a minimum period of nine months was a contractual liability and the amount finally settled was actually less than the amount which would have been payable by it as per the agreement. 4. Consequently, the Tribunal held that the amount in question paid by the assessee on account of compensation was deductable under Section 2010:DHC:2709-DB