1 itxa107-10 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.107 OF 2010 The Commissioner of Income Tax-7 ..Appellant. V/s. M/s. Redifusion Dentsu Young & Rublicam Pvt. Ltd. ..Respondent. Mr. Suresh Kumar for appellant. Mr. Jitendra Jain with Damodar i/b. Kanga & Co. for respondent. CORAM : J.P. DEVADHAR AND MRS. MRIDULA BHATKAR, JJ. DATED : 7TH FEBRUARY, 2011 P.C. :- 1. Three questions of law are raised by the Revenue in this appeal which read thus:- (A) Whether on the facts and in the circumstances of the case and in law, the ITAT is right in allowing computer upgradation expenditure of Rs.18,39,000/- as revenue expenditure ? (B) Whether on the facts and in the circumstances of the case and in law, the ITAT is right in upholding the order of the CIT(A) allowing expenditure of Rs.45 lakhs on account of membership and subscription to clubs as revenue expenditure as against capital expenditure treated by the A.O. ? (C) Whether on the facts and in the circumstances of the case and in law. the ITAT is right in upholding the order of the CIT(A) in deleting addition of Rs.24,89,407/- made by A.O. on account of non recovery of debtors in spite of the fact that the event of forfeiture and refund has taken place in A.Y. 2000-01 ? 2. As regards question (A) is concerned, the Tribunal has 2 itxa107-10 recorded a finding of fact that the assessee had spent Rs.18.39 lakhs for replacement of parts of the computer, which has resulted in upgradation of the computer machines and that no new asset has come into being, the expenditure is allowable as revenue expenditure. No fault can be found with the aforesaid finding of fact recorded by the Tribunal. Hence question (A) cannot be said to be substantial question of law. 3. As regards question (B) is concerned, the Tribunal has answered the question in favour of the assessee by relying upon the decision of this Court in the case of Otis Elevators Ltd. reported in 195 ITR 682 (Bom). In this view of the matter, the second question cannot said to give rise to any substantial question of law. 4. As regards question (C) is concerned, CIT (A) has recorded a finding of fact that the forfeiture of share application amount, amounting to Rs.24,89,407/- cannot be treated as income at all. The Revenue has not filed any appeal against that finding of the CIT(A). The appeal was filed by contending that the said amount ought to have been held taxable in the year in question and not in any subsequent year. Admittedly, the above amount has been offered to tax in the A.Y. 2001-02 and the same has been accepted by the Revenue. In this view of the matter, the third question raised by the Revenue cannot be said to be question of law. Accordingly, the appeal is dismissed with no order as to costs. (MRS. MRIDULA BHATKAR, J.) (J.P. DEVADHAR, J.)