2016 (10) TMI 548

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....mmon impugned order dated 8th August, 2013. The impugned order relates to Assessment Years 2006-07 and 2007-08. 3. The Income Tax Appeal No.728 of 2014 has been filed for A.Y. 2007-08 and Income Tax Appeal No.777 of 2014 has been filed for A.Y. 2006-07. 4. The Revenue urges following identical question of law in both the appeals for our consideration : (i) Whether on the facts and in the circumstances of the case and in law, the Tribunal was right in treating the professional fees paid to its collaborator KSB AG of Germany for implementing the SAP programme as an allowable expenditure when the use of this software enhances the efficiency of the organization which is enduring in nature and as good as the acquisition of an asse....

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....r 2007-08. The respondent assessee accepted the draft assessment order by not filing any objection to Dispute Resolution Panel (DRP). No appeal was filed to the CIT(A) for the Assessment Year 2006-07, as the final order of assessment was passed consequent to directions of DRP. Therefore, filing an appeal to the Tribunal. The CIT(A) by order dated 23rd March, 2012 rendered a finding of fact that no amount was paid towards purchase of SAP programme. It held that SAP as a software / system which had been acquired (owned) by M/s. KSB Germany. The payments made by the respondent assessee to M/s. KSB Germany were in the nature of professional fees for implementation of the SAP programme in India. Consequently, the CIT(A) allowed the respondent as....

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....CIT(A) as well as the Tribunal have concurrently rendered a finding of fact that there was no acquisition / purchase of the SAP programme by the respondent assessee. Consequently, occasion to apply depreciation in accordance with the Income Tax Rules would not arise in the present case. 11. Be that as it may, the impugned orders of the CIT(A) as well as the Tribunal record the fact that the professional charges paid for upgrading the software has made the respondent assessee's operation more efficient. It did not result in any profit making apparatus coming into existence. 12. Our attention was also drawn to the decision of this Court in Commissioner of Income Tax Vs. Geoffrey Manners & Co. Ltd. 226 Taxman 135 wherein in the conte....