{"id":2839,"date":"2011-03-12T15:06:15","date_gmt":"2011-03-12T09:36:15","guid":{"rendered":"http:\/\/itatonline.org\/archives\/?p=2839"},"modified":"2011-03-12T15:06:15","modified_gmt":"2011-03-12T09:36:15","slug":"dcit-vs-edelweiss-capital-ltd-itat-mumbai-claim-for-business-loss-in-place-of-bad-debt-maintainable-website-development-expense-is-not-capital-expenditure","status":"publish","type":"post","link":"https:\/\/itatonline.org\/archives\/dcit-vs-edelweiss-capital-ltd-itat-mumbai-claim-for-business-loss-in-place-of-bad-debt-maintainable-website-development-expense-is-not-capital-expenditure\/","title":{"rendered":"DCIT vs. Edelweiss Capital Ltd (ITAT Mumbai)"},"content":{"rendered":"\n\n
Click here to download the judgement (edelweiss_bad_debt_business_loss.pdf) <\/strong> <\/a><\/p><\/td>\n<\/tr>\n<\/table>\n


\nIf not “Bad Debt”, claim for \u201cBusiness loss\u201d maintainable. Website development expense is not capital expenditure
\n<\/strong><\/p>\n

The assessee, engaged in investment activities, advanced Rs. 27.97 lakhs for development of a website. As the advance was not recoverable, the assessee wrote off the amount and claimed it as a \u201cbad debt\u201d even though the conditions of s. 36(1)(vii) & 36(2) were not satisfied<\/em>. The AO rejected the claim though the CIT (A) allowed it. On appeal by the department to the Tribunal, HELD:<\/p>\n

(i) Though the claim as a \u2018bad debt\u2019 is not allowable, the assessee is entitled under Rule 27 to support the CIT (A)\u2019s order on the ground that the amount should be allowed as a \u2018business loss\u2019<\/em><\/strong>. The subject-matter of an appeal should be understood not in a narrow and unrealistic manner but should be so comprehended as to encompass the entire controversy between the parties which is to be adjudicated upon by the Tribunal. Such a claim can be considered provided no new facts are needed (Edward Keventer<\/strong> 123 ITR 200 (Del) & Gilbert & Barker<\/strong> 111 ITR 529 (Bom) followed);<\/p>\n

(ii) On merits, the department\u2019s argument that the amounts paid for development of websites cannot be allowed as business loss because if the websites had been successfully put up, the expenditure would have been capital expenditure is not acceptable. because (a) as the expenditure was abortive, no capital asset has in fact been acquired<\/em><\/strong> and (b) even if the website had materialized, it does not result in an advantage of an enduring nature or in the capital field as it is only for the day-to-day running of the business and provision of information<\/em><\/strong>. <\/p>\n","protected":false},"excerpt":{"rendered":"

On merits, the department\u2019s argument that the amounts paid for development of websites cannot be allowed as business loss because if the websites had been successfully put up, the expenditure would have been capital expenditure is not acceptable. because (a) as the expenditure was abortive, no capital asset has in fact been acquired<\/em><\/strong> and (b) even if the website had materialized, it does not result in an advantage of an enduring nature or in the capital field as it is only for the day-to-day running of the business and provision of information<\/em><\/strong><\/p>\n

Read more ›<\/a><\/div>\n

<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[4,8],"tags":[],"class_list":["post-2839","post","type-post","status-publish","format-standard","hentry","category-all-judgements","category-tribunal"],"acf":[],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/posts\/2839","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/comments?post=2839"}],"version-history":[{"count":0,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/posts\/2839\/revisions"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/media?parent=2839"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/categories?post=2839"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/tags?post=2839"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}