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Issues: (i) Whether the disallowance of software expenses required fresh adjudication; (ii) whether the disallowance of repairs and renovation expenses at leased premises was sustainable; (iii) whether the claim of bad debts in respect of TDS certificates required fresh adjudication; and (iv) whether brought forward long-term capital loss could be carried forward after allowing relief under section 54EC.
Issue (i): Whether the disallowance of software expenses required fresh adjudication.
Analysis: The issue was treated as covered by the Tribunal's earlier decision in the assessee's own case for an earlier assessment year, where the matter had been restored to the Assessing Officer for a fresh decision in accordance with the Special Bench view in Amway India Enterprises.
Conclusion: The disallowance was set aside and the matter was remanded to the Assessing Officer for fresh adjudication.
Issue (ii): Whether the disallowance of repairs and renovation expenses at leased premises was sustainable.
Analysis: The issue was found to be covered by the Tribunal's earlier order in the assessee's own case for an earlier year, and no distinguishing feature was shown for the year under appeal.
Conclusion: The disallowance was deleted in favour of the assessee.
Issue (iii): Whether the claim of bad debts in respect of TDS certificates required fresh adjudication.
Analysis: The claim raised a factual question whether the bad debt write-off overlapped with disputed bill amounts and could result in double deduction. As the record did not contain sufficient particulars of the TDS certificates and related claims, the matter required reconsideration.
Conclusion: The disallowance was set aside and the matter was remanded to the Assessing Officer for fresh adjudication.
Issue (iv): Whether brought forward long-term capital loss could be carried forward after allowing relief under section 54EC.
Analysis: Relief under section 54EC was to be given while computing capital gains under section 45 before the provisions relating to set-off and carry forward of loss were applied. The brought forward capital loss could not first be adjusted so as to defeat the statutory relief.
Conclusion: The assessee was entitled to carry forward the remaining long-term capital loss.
Final Conclusion: The appeal succeeded on the repairs and capital loss issues, while the software expense and bad debt issues were sent back for fresh consideration.
Ratio Decidendi: Relief under section 54EC is to be allowed in the computation of capital gains under section 45 before set-off or carry forward of brought forward capital loss is applied.
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