What did the High Court hold?

The Tribunal, relying on High Court decisions, directed the Assessing Officer to allow certain claims as revenue expenditure and also to allow depreciation on capital items for the relevant assessment years.

The assessee, engaged in defence electronics, claimed deferred revenue expenditure. The Assessing Officer treated this as capital expenditure. The appellate Commissioner partly allowed the appeal, directing depreciation on certain amounts.

What were the issues?

Whether the Tribunal erred in allowing certain claims as revenue expenditure and depreciation on capital items, and if a substantial question of law arises from the Tribunal's order.

CIT vs M/S Alpha Design | Karnataka High Court 2015

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

Dated this the 14th day of September, 2015

Present

THE HON’BLE MR JUSTICE VINEET SARAN

THE HON’BLE MR JUSTICE B MANOHAR

Income Tax Appeal 215 / 2015 Between 1 Commissioner of Income Tax

C R Building, Queens Road

Bangalore

2 Deputy Commr. Of Income Tax

Circle 11 (1), Rashtrothana Bhavan

Nrupathunga Road Bangalore

Appellants

(By Sri K V Aravind, Adv. a/w G Kamaladhar, Adv.)

And

M/s Alpha Design Technologies Pvt Ltd # 24, 12th Floor, Service Road Domlur 2nd Stage Extension Indiranagar, Bangalore

Respondent

Appeal is filed under S.260 A of the Income Tax Act, 1961 praying to set aside the orders passed by the ITAT, Bangalore In ITA 1385/Bang/2013 on 22.1.2015 confirming the order of the appellate Commissioner and confirm the order of the Dy. Commr. Of Income Tax, Circle 11(1), Bangalore.

Appeal coming on for Admission this day, Vineet Saran J, delivered the following:

JUDGMENT

Challenging the order of the Tribunal, this appeal has been filed by the Revenue.

The assessee is in the business of defence electronics. For the assessment year 2007-08 and 2008-09, assessee claimed deferred revenue expenditure which was treated as capital expenditure by the Assessing Officer. Challenging the same, assessee filed an appeal which was partly allowed by the appellate Commissioner who directed the Assessing Officer to allow depreciation on certain amounts. Aggrieved by the said order, Revenue filed an appeal, in which, though no cross objection was filed by the assessee, but relying on the decision of the Calcutta, Andhra Pradesh and Madras High Courts, Tribunal directed the Assessing Officer to allow the certain claims of the assessee as revenue expenditure and also to allow depreciation on capital items for the said two assessment years.

Having heard learned counsel for the appellants, we are of the view that no interference is called for with the order of the Tribunal. As such, we are of the opinion that no substantial question of law arises in this appeal for determination by this Court.

Appeal is accordingly, dismissed.

Sd/- Judge

Sd/-

Judge

THE COMMISSIONER OF INCOME-TAX vs. M/S ALPHA DESIGN

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