TaxTMI 
TaxTMI 
2012 (5) TMI 338
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....confirming the same subject to allowing 60% Depreciation on the same. 1.2 The learned assessing officer had erred in holding that the appellant has acquired intangible asset giving enduring benefit and disallowed the entire sum of Rs.1,96,03,928/- as capital expenditure and the learned CIT (A) has also erred in holding the expenditure to be of capital in nature. On proper appreciation of facts and law applicable, no capital asset having enduring benefit came into existence. 1.3 On the facts and circumstances of the case and law applicable, the amount spent being licence fee and that too for a small period is revenue in nature and hence the same is to be allowed as revenue deduction as claimed by the appellant. 2. The Assessing Officer ha....
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....re. The AO pointed out that the similar issue was involved in the earlier year and there was no change of facts on this issue as compared to the last year, he therefore by following his earlier order for the preceding year, disallowed the total expenses towards purchase of computer software amounting to Rs.1,96,03,928 and considered the same as capital in nature. 4. The assessee carried the matter to the ld. CIT(Appeals) and submitted that the expenditure incurred for purchase on computer application software was revenue in nature and hence allowable in toto. It was stated that such expenditure had not brought into existence any capital asset or any enduring benefit because the life span of such software was only two years and that the exp....
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....ftware and balance of the addition amounting to RS.78,41,569 was confirmed. 6. Now the assessee is in appeal. The ld. counsel for the assessee at the very outset stated that a similar issue having identical facts was involved in the earlier year in ITA No. 1385/B/10 wherein the issue has been sent back to the AO for fresh adjudication. He furnished a copy of the order dated 26.08.2011 passed by the ITAT, Bangalore Bench 'B'. He therefore requested that since the facts are similar for the year under consideration vis-à-vis A.Y. 2003-04, therefore the same course be adopted for this year also. 7. In her rival submissions, the ld. DR although supported the orders of authorities below, but could not controvert the aforesaid contention ....
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.... Court and that of the Special Bench, as rightly pointed out by the learned Departmental Representative, neither the assessment order nor the appellate order consists of any discussion regarding the length of the period for which software was acquired against the payment of license fee. In such facts and circumstances, we deem it fit and proper to restore this matter back to the file of the AO with a direction to look into the length of periods of each software acquired during the assessment year under question and then to apply the principles laid down by the Hon'ble High Court and the Special Bench cited supra. In other words, in principle, the AO has to follow the decision of the Hon'ble High Court and Special Bench cited supra but after....
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....estion was shown as provision in the P&L account for the A.Y. 2003-04 and the same was disallowed and added back as income by the AO in the A.Y. 2003-04, therefore in the A.Y. 2004-05 it had been reversed and the net taxable income had been reduced. It was pointed out that such reversal of a provision in a subsequent year was proper accounting treatment. Reliance was placed on the decision of the ITAT Delhi Bench in the case of M/s. Frederic R. Harris (India) Pvt. Ltd. v. DCIT 81 ITD 227 (Del). 13. The ld. CIT(A) after considering the submissions of the assessee observed that the provision reduces the taxable profit, therefore what was due from the assessee did not get collected. The ld. CIT(A) was of the view that in order that such provi....
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....m of Rs.25,19,948 which was the actual amount of sales bonus paid as per the certificate, therefore the difference of Rs.18,98,870 was already reduced while computing the income for the A.Y. 2003-04. So, it was a double addition made by the AO because the addition has already been made in the earlier year i.e., A.Y. 2003-04, therefore, it should not have been added again in the year under consideration. 15. In her rival submissions, the ld. CIT(DR) strongly supported the orders of the authorities below and reiterated the observations made by the ld. CIT(A) in the impugned order. 16. After considering the submissions of both the parties and the material on record, it is noticed from the copy of computation of income for the A.Y. 2003-04 pl....