TaxTMI 
TaxTMI 
2021 (1) TMI 923
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....al Insurance Corporation V/s. CIT (reported in 286 ITR page 232)? 2. Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the assessee is eligible for claim of deduction under section 80JJAA despite it neither being involved in the activities envisaged in the section 80JJA nor the employees for which the deduction is claimed can be classified as "workmen" as noted by the assessing authority? 3. Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the assessee is eligible for claim of deduction under section 10A despite it being involved in activity of mobile value added service which is not an IT enabled service by wrongly interpreting the CBDT Notification No.11521? 4. Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the assessee is eligible for claim of "Legal and Professional Charges" of Rs. 1,96,32,131/- and Rs. 24,08,000/- as revenue expenditure whereas the same have been incurred for enduring benefit to the business and should be treated only as capital expenditure as rightly held....
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....rough IPO amounting to Rs. 6,87,770/- as the same was capital in nature and was not a revenue expenditure. It is further submitted that the Commissioner of Income Tax (Appeals) had accepted the aforesaid view of the Assessing Authority, but allowed the alternate claim of the assessee made under Section 35D(3)(c) of the Act. It is also pointed out that the Tribunal has upheld the aforesaid view taken by the Commissioner of Income Tax (Appeals). It is submitted that Section 35D(2)C(iv), the words 'stamp duty' is not mentioned and only expressions namely underwriting commission, brokerage and charges for drafting, typing, printing and advertisement of the prospectus are mentioned and therefore, the expressions used in Section 35D(2)C are restrictive and not illustrative in nature. 5. With regard to the claim of the assessee for deduction under Section 80JJAA of the Act, it is submitted that the Assessing Officer rightly did not allow the assessee, the deduction claimed by it on the ground that the assessee is not an industrial undertaking engaged in the manufacture of an article or thing but is engaged in providing telecom services. However, the Tribunal, by placing relianc....
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.... appreciate the aforesaid aspect of the matter. It is also pointed out that the Assessing Officer has rightly denied the claim with regard to adjustment in depreciation and has re-classified media resource board as plant and machinery but not as computers by holding them to be telecom equipment and has allowed depreciation at 15% as applicable to plant and machinery. However, the Tribunal failed to appreciate that under explanation (a) to Section 36(1)(xi) of the Act, it is evident that the media resource board cannot be considered as equivalent to computer. It is also pointed out that the media resource board is a device to support a combination of functions, performed in conjunction with the computer and servers and the media resource board cannot be called as computers. It is argued that the boards are connected to computer servers which assist in receiving calls and would function only when attached to computers and boards increase the working capacity of the computers to the extent the computers receive calls and convert them into digital form. In support of aforesaid submission, reliance has been placed on the decision rendered by the Constitution Bench of the Supreme Court i....
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....-II Vs. McKINSEY KNOWLEDGE CETNRE INDIA PVT. LTD.' DATED 27.03.2015 IN ITA NO.217/2014 and our attention has been invited to paragraphs 9 and 10, respectively. 8. With regard to the legal and professional charges, it is submitted that the Tribunal by assigning valid and cogent reasons which have been recorded in paragraph 9.7 of the order, has rightly allowed the claim for deduction. It is also urged that the adjustment in depreciation has rightly been allowed. In this connection, our attention has been invited to findings recorded by the Tribunal in paragraph 10.6.2 and has been submitted that the Tribunal has taken note of the functions of the media source board and by placing reliance in the case of 'DCIT Vs. MICROSOFT CORPORATION INDIA P. LTD.' 139 TTJ 40, which deal with the case of routers, has rightly recorded the conclusion that the media resource board is a necessary accessory to be called a computer component. It is further submitted that the order passed by the Tribunal does not call for any interference. 9. We have considered the submissions made on both sides and have perused the record. We propose to deal with the substantial questions of law ad seri....
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....in which the undertaking begins to manufacture or produce such articles or things or computer software, as the case may be, shall be allowed from the total income of the assessee." Thus, from perusal of the relevant extract of Section 10A(1), it is evident that the deduction under Section 10A of the Act is available to an undertaking if sale proceeds of articles of things of computer software exported out of India or received in or brought into in India in convertible foreign exchange, within a period of six months from the end of previous year or within such further period that the competent authority may allow in this behalf. The Tribunal, in paragraph 7.4.4 has taken note of the activities of the assessee and has held that the assessee is engaged in the business of mobile added value services, which involve content development in its STP unit. It has further been held that the assessee has a dedicated studio in this STP unit where music related content is developed. The assessee procures music and other contents on the third parties. The assessee also uses its studios for content development. It has further been held that assessee is engaged in the activity of developing cont....
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....at 15% as applicable to plant and machinery. The expression 'computer system' has been defined in explanation (a) to Section 36(1)(xi) of the Act which reads as under: "(a) "computer system" means a device or collection of devices including input and output support devices and excluding calculators which are not programmable and capable of being used in conjunction with external files, or more of which contain computer programmes, electronic instructions, input data and output data, that performs functions including, but not limited to, logic arithmetic, data storage and retrieval, communication and control." The Tribunal, in paragraphs 10.6.2 to 10.6.4, has discussed the aforesaid issue and has held that function of media resource board is to support a combination of functions performed in conjunction with computers and servers and media resource boards are the boards which are connected to computer servers which assist in receiving calls and would function only when attached to computers. The media resource boards increase the working capacity of computers to the extent that computers receive calls and convert them into digital form. Thus, the media resource b....