TaxTMI 
TaxTMI 
2013 (7) TMI 698
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..... 11,098/-under Section 14A of the Income Tax Act, 1961 ('the Act' for short). Likewise, in Tax Appeal No. 312 of 2013, additional question No.2 is with respect to similar disallowance of Rs. 3,152/-. Both amounts are extremely small. Such questions are, therefore, not considered only on that basis. 3. Sole surviving question in all these appeals raised by the revenue is as follows: "(a) Whether in the facts and circumstances of the case, the Hon'ble ITAT has erred in law in confirming the order of CIT(A) in deleting disallowance of depreciation on an intangible assets developed by assessee called 'AVTAR TM'? 4. The issue pertains to the assessee's claim of depreciation on development of a software called '....
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....ation was allowed to the appellant upto A.Y. 2005-06. In view of this A.O's action is not in accordance with law. Disallowance or depreciation is unwarranted and deleted. This ground of appeal is allowed." 7. We may notice that before the CIT(A), the assessee had, in the written submissions, outlined the details of the programme as also the nature of expenditure incurred in its development. Such averments of the assessee read as under: "Background and facts of the case 1. Net & Nuts Limited is engaged in the business of offering comprehensive solutions in different IT and IT enabled services with specific focus on interest technology, telecommunication system and services. The compa....
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....nbsp; All expenditure incurred during the Research phase were expended out in F.Y. 2001-02. The Development phase of AVTAR TM commenced from 01-06-2000 and was concluded on 31.03.2002 which included following activities: (a) Technical feasibility of completing AVTAR TM (b) Intention to complete and use AVTAR TM (c) Ability to use AVTAR TM (d) A business model (B2C) which demonstrated how AVTAR TM would generate future economic benefits (e) Availability of adequate resources (funding from GVFL) (f) Ability to measure the expenditure attributable to ....
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....sp; 6.4 Non-monetary assets are assets other than monetary assets. 6.5 Research is original and planned investigation undertaken with the prospect of gaining new scientific or technical knowledge and understanding. 6.6 Development is the application of research findings or other knowledge to a plan or design for the production of new or substantially imported materials, devices, products, processes, system or services prior to the commencement of commercial production or use. 6.7 Amortization is the systematic allocation of the depreciable amount of an intangible asset over its useful life." 2. AVTAR TM has regis....
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....emark. Assessing Officer's objection that, on mere development of a new software depreciation as an intangible asset cannot be granted therefore would not survive. The sole basis in the further proceedings, therefore, was that the expenditure incurred in development such software was not established by the assessee. 11. In this respect, the CIT(A) as well as the Tribunal have not accepted the Assessing Officer's version. It is true that such expenditure and the details thereof were placed by the assessee before the CIT(A) in the original assessment for the assessment year 2006-07. The revenue has not questioned such details supplied. More importantly, in the reopened proceeding, full facts were before the Assessing Officer. In the origin....