The division bench of Gujarat High Court held that, Survey expenses of a Company is deductible from Income Tax under the provisions of the Income Tax Act.
While completing Assessment against the assessee, the Assessing Officer disallowed the claim for depreciation on non-compete fee, Web designing expenses, Trademark expenses, Survey Expenses etc. on appeal, the first appellate authority allowed these expenses.
Though the orders were challenged in appeal, the Revenue could not secure any relief from the Tribunal. The matter was therefore, brought before the High Court.
Dismissing the appeal filed by revenue, the bench observed that since the Department had allowed the claim of depreciation on non-competent fee in the earlier assessment years, it cannot deviate from the same as there is no change in facts.
Confirming the allowance of web designing expenses and Trade mark expenses, the division bench comprising of Justice M.R Shah and Justice B.N Karia relied on the Delhi High Court decision in CIT vs. Indian Visit Com Pvt Ltd, and the decision of the Apex Court in Finlay Mills Ltd and held that the same is revenue expenditure and is allowable.
With regard to the claim of survey expenses, the bench upheld the view of the first appellate authority that CIT(A) also observed and held that expenditure incurred on survey number treated as revenue in nature as the survey expenses has been incurred to improve the efficiency of the business by finding out customers preference for sugar substitute, market research for better margarine evaluation of cosmetic product, software support and maintenance etc.
Read the full text of the Judgment below.
