Tribunal rules in favor of assessee on key issues, directs reevaluation. Legal precedents cited.

The Tribunal ruled in favor of the assessee on various issues, including the disallowance of software expenditure as revenue in nature, disallowance of entrance fee paid to a club, and disallowance of deduction under certain sections of the Act. The Tribunal directed the Assessing Officer to recompute deductions and reallocate expenses based on actual use. The levy of interest under sections 234B and 234C was upheld as mandatory. The Tribunal provided detailed reasoning based on legal precedents, partially allowing the assessee's appeals and dismissing the Revenue's appeals.

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Issues Involved:
1. Disallowance of software expenditure by holding it as capital in nature.
2. Disallowance of deduction on amortised lease premium expenditure, landscaping and development charges.
3. Disallowance of provision for expenditure in respect of benefit under Bhavishya Kalyan Yojana (BKY) an employee welfare scheme.
4. Disallowance of provision for Medi-claim insurance coverage scheme.
5. Disallowance of deduction claimed u/s. 35D in relation to expenditure incurred for increasing authorized share capital.
6. Disallowance of entrance fee paid to Poona Club.
7. Disallowance of deduction u/s. 80HHE of the Act.
8. Reallocation of expenditure between Software Technology Park (STP) and Non-STP Unit.
9. Re-computation of deduction u/s. 10A of the Act.
10. Levy of Interest u/s. 234B and 234C.
11. Expenditure for obtaining a license to use software held as Revenue expenditure whereas it should have been held as capital in nature.
12. Deleting of disallowance u/s. 14A of the Act.
13. Enhanced deduction u/s. 10A with respect to disallowance of expenditure-Travelling and Conveyance, depreciation, etc.
14. Disallowance of taxes and employees cost paid in Korea.

Detailed Analysis:

1. Disallowance of Software Expenditure:
The Tribunal held that the expenditure on acquiring computer software is revenue in nature. The Tribunal referenced its previous decision in ITA No. 1345/PN/2011 and the Hon'ble Bombay High Court's decision in CIT Vs. Raychem RPG Ltd., which established that software facilitating business operations without forming part of the profit-making apparatus is a revenue expenditure.

2. Disallowance of Deduction on Amortised Lease Premium Expenditure:
The Tribunal dismissed the assessee's appeal, following its earlier decision in ITA No. 1345/PN/2011, which had rejected the amortization of leasehold premium as deductible.

3. Disallowance of Provision for Expenditure Under BKY Scheme:
The Tribunal remitted the matter back to the Assessing Officer to determine the deduction on account of BKY scheme and medi-claim insurance, following its earlier decision in ITA No. 1345/PN/2011.

4. Disallowance of Provision for Medi-claim Insurance:
Similar to the BKY scheme, the Tribunal directed the Assessing Officer to determine the deduction for medi-claim insurance, consistent with the previous ruling.

5. Disallowance of Deduction u/s. 35D:
The Tribunal upheld the disallowance, referencing the Hon'ble Supreme Court's decisions in Brooke Bond India Ltd. Vs. CIT and Punjab State Industrial Development Corporation Ltd. Vs. CIT, which classified such expenditure as capital in nature.

6. Disallowance of Entrance Fee Paid to Poona Club:
The Tribunal allowed the appeal, citing the Full Bench decision of the Hon'ble Punjab and Haryana High Court in CIT Vs. Groz Beckert Asia Limited, which held that corporate membership fees do not create a capital asset but are a revenue expenditure.

7. Disallowance of Deduction u/s. 80HHE:
The Tribunal directed the Assessing Officer to include the export turnover of EOU while computing deduction u/s. 80HHE, following its earlier decision in ITA No. 1345/PN/2011. It also held that AMC receipts are part of business income and should not be excluded from turnover.

8. Reallocation of Expenditure Between STP and Non-STP Unit:
The Tribunal partly accepted the assessee's contentions on the allocation of expenses but remitted the matter back to the Assessing Officer for verification. Depreciation on vehicles should be allocated based on actual use, while travelling expenses should be allocated based on the activity carried out.

9. Re-computation of Deduction u/s. 10A:
The Tribunal remitted this issue back to the Assessing Officer for re-computation in line with its directions on the allocation of expenses.

10. Levy of Interest u/s. 234B and 234C:
The Tribunal held that the levy of interest u/s. 234B and 234C is mandatory and consequential, dismissing the assessee's appeal on this issue.

11. Expenditure for Obtaining License to Use Software:
The Tribunal rejected the Revenue's contention that the expenditure should be capital in nature, affirming its earlier decision that such expenditure is revenue in nature.

12. Deleting of Disallowance u/s. 14A:
The Tribunal upheld the CIT(A)'s decision, noting that no dividend was earned from the investment in Tata Technology (US), and thus, the provisions of section 14A were not applicable.

13. Enhanced Deduction u/s. 10A:
The Tribunal dismissed the Revenue's appeal, finding no merit in the contention that certain expenditures should not be considered for exemption u/s. 10A.

14. Disallowance of Taxes and Employees Cost Paid in Korea:
The Tribunal upheld the CIT(A)'s decision, noting that the assessee had not claimed any deduction for the taxes paid in Korea, which were debited below the line in the profit and loss account.

Conclusion:
The appeals of the assessee were partly allowed, while the appeals of the Revenue were dismissed. The Tribunal provided detailed directions on the reallocation of expenses and the computation of deductions, ensuring compliance with established legal precedents.

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