TaxTMI 
TaxTMI 
2016 (9) TMI 1522
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....nditure of B15,61,995/-. 4. The ld. Counsel for the assessee submitted that the software which were acquired by the assessee did not result in any enduring benefit to it. As per the ld. Authorised Representative these were payments for renewing software licenses and for antivirus for disaster recovery system and for internet usage tracker. The ld. Authorised Representative submitted that the ld. Assessing Officer erroneously held it to be acquisition of capital asset and disallowed the claim. As per the ld. Authorised Representative, the ld. Commissioner of Income Tax (Appeals) confirmed the treatment without properly appreciating the facts relying on the judgment of Hon'ble Delhi High Court in the case of CIT vs. Asahi India Safety Glass (346 ITR 329). The ld. Authorised Representative submitted that the expenditure incurred for acquiring software which did not give enduring benefit could only be considered as Revenue expenditure. 5. Per contra, the ld. DR strongly supported the orders of the authorities below. 6. We have considered the rival contentions and perused the orders of the authorities below. It is not disputed by the Revenue that type of software acquired had maxi....
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....be considered as capital outgo but only as Revenue expenditure, allowable in the year in which it was paid. The above judgment is dated 1st August, 2001. In the case of Rane (Madras) Ltd (supra) their lordship had held that expenditure incurred for setting up new factory which resulted in extension of an existing unit could only be considered as Revenue expenditure. We find that judgment in the case of Gemini Arts Pvt. Ltd (supra) was pronounced much earlier to the judgment of Hon'ble Apex Court in the case of Enterprising Enterprises (supra). In the last mentioned case, the Hon'ble Apex Court had clearly held that irrespective of whether lease money was paid as slumpsum or installment it was nothing but capital expenditure. As for the reliance placed by the ld. Authorised Representative on Rane (Madra) Ltd (supra) the issue there was the nature of expenditure incurred for setting up a new factory which was extension of an existing unit. Here on the other hand, the facts show that the assessee had obtained leasehold right for 99 years over the land which was definitely in the nature of acquisition of a capital asset. Therefore, we are of the opinion that the disallowance was righty....
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.... Income Tax (Appeals) in restricting disallowance 2% of the dividend income claimed by the assessee as exempt. Accordingly, we dismiss the ground No.2 of the Revenue. 20. Vide its ground No. 3, the grievance raised by the Revenue is that the ld. Commissioner of Income Tax (Appeals) deleted a disallowance of notional interest working out to B2,70,52,088/-, as relatable to interest free loans granted by the assessee to its subsidiary. 21. Before us, the ld. Departmental Representative submitted that assessee could not show commercial expediency for the loans given to its subsidiaries. As per ld. Departmental Representative, the assessee had borrowed B43,860/- lakhs of which it had given free interest loan of B3,379/- lakhs. Ld. Departmental Representative submitted that interest of B2,958/- lakhs was paid by the assessee on the loans taken by it. As per ld. Departmental Representative the amount of interest free loans were utilized by Sundaram Fasteners Investment Ltd (SFIL) which in turn gave loans to certain other companies. Thus, as per ld. Departmental Representative assessee could not demonstrate how the loans given were commercially expedient. 22. Per contra, the ld. Auth....
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....relying on Sec. 40(a)(ia) of the Act. 25. The ld. Departmental Representative submitted that the export commissions paid to Non Resident Agents fell within the ambit of Sec. 195(1) of the Act. As per ld. Departmental Representative if the assessee was of the opinion that there was no need for deducting tax at source then it should have obtained a certificate from the ld. Assessing Officer as stipulated u/s.195(2) of the Act. Further, as per ld. Departmental Representative by virtue of explanation added below Sec. 9 of the Act through Finance Act, 2010 with retrospective effect from 01.06.1976 there was no requirement of residency of a Non Resident or place of business or business connection in India, nor it was necessary for the non resident to render services in India 26. Per contra, the ld. Authorised Representative submitted that Non Resident person to whom sale commission was paid was canvassing sales for the assessee abroad and no part of their services were rendered in India. As per ld. Authorised Representative nonresident agent was providing warehousing services in foreign soil. According to him no part of income could arise in India since nonresident was doing business....
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....onal depreciation. 33. Before us, the ld. Authorised Representative submitted additional depreciation of B99,57,900/- claimed by the assessee was disallowed by the ld. Assessing Officer on a ground that such depreciation was admissible only in the year in which new plant and machinery was put to use. As per ld. Authorised Representative, the ld. Commissioner of Income Tax (Appeals) erroneously confirmed this view of the ld. Assessing Officer disregarding the arguments of the assessee that machinery on which additional depreciation was claimed was acquired during the second half of financial year 2006-07 and therefore balance of the additional depreciation which was restricted to 50% of the eligible amount had to be allowed in the impugned assessment year. In support of this, ld. Authorised Representative placed reliance on judgment of Karnataka High Court in the case of CIT vs. Rittal India Pvt. Ltd 380 ITR 428. 34. Per contra, the ld. DR strongly supported the orders of the authorities below. 35. We have considered the rival contentions and perused the orders of the authorities below. There is no dispute, that the additional depreciation claimed by the assessee was balance o....
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....erest on the refunded amount as contemplated u/s 234D of the Act. 4. After hearing both the parties and on perusal of the orders of the Revenue Authorities as well as the cited judgment of the Hon'ble Madras High Court in the case of Infrastructure Development Finance Co. Ltd (supra), we are of the opinion that the decision taken by the CIT (A) vide para 5.3 of the impugned order is required to be reversed on this issue. Considering the same, the second issue raised by the Revenue is decided in favour of the assessee and against the Revenue''. Accordingly, we are of the opinion that claim of the assessee has to be allowed. The ld. Assessing Officer is directed to rework interest levied u/s.234D of the Act. Ground No.4 is allowed. 40. Vide ground No.5, the assessee is aggrieved on disallowance of Long Term Capital Loss on redemption of units of ICICI Venture Capital Fund and vide ground no.6 assessee is aggrieved on disallowance of upfront lease rent of B27,80,596/-. 41. Before us, the ld. Counsel for assessee submitted that lower authorities relying on the decision of Apex Court in the case of Goetze (India) Ltd vs. CIT (2006) 284 ITR 323 refused to consider above clai....
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.... Vide ground no.2, the Revenue is aggrieved on deletion of notional interest of B61,31,769/- attributed to interest free loans given by the assessee to its subsidiary SFIL. 47. We find that similar issue has come up before this Tribunal in Revenue's appeal for the assessment year 2006-2007. We have held that at para 23 that the matter requires afresh consideration by the ld. Assessing Officer for verifying commercial expediency. For the impugned assessment year also similar direction is given. Ground No. 2 is allowed for statistical purpose. 48. Vide ground No.3, the Revenue is aggrieved on deletion of disallowance made by the ld. Assessing Officer u/s.40(a)(ia) of the Act for export commission paid to non-resident person. 49. We find that similar issue has been raised by the Revenue in its appeal for the assessment year 2006-2007. We have at para 27 held that disallowance was rightly deleted by the ld. Commissioner of Income Tax (Appeals). The fact situation being the same, we do not find any reason to interfere with the order of the Commissioner of Income Tax (Appeals) on this issue for the impugned assessment year also. Accordingly, ground no.3 stand dismissed. 50. The a....
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.... as a provision and not as prior period of expenditure. We are, therefore of the opinion that assessee failed to justify its claim, and it was rightly disallowed by the lower authorities. Ground No.3 stand dismissed. 58. Vide no. 4, assessee is aggrieved on disallowance of long term capital loss of B90,188/- on redemption of units of ICICI and inclusion of tax free interest income of B1,26,765/- received from UTI. 59. The ld. Counsel for assessee submitted that these claim were preferred by the assessee for the first time before ld. Commissioner of Income Tax (Appeals). As per ld. Authorised Representative, ld. Commissioner of Income Tax (Appeals) relying on the judgment of Hon'ble Apex Court in the case of Goetze (India) Ltd (supra) had refused to consider the claim. However, as per the ld. Authorised Representative by virtue of judgment of Apex Court in the case of National Thermal Power Corporation (supra) appellate authority had ample powers to consider such a claim. 60. Per contra, the ld. DR strongly supported the orders of the authorities below. 61. We have considered the rival contentions and perused the orders of the authorities below. We find that similar issue ha....