2016 (9) TMI 1605

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....sale of product License on commission basis and trading of product software license, filed return of income for relevant Assessment Year ('AY') on 28.09.2009. The return of income was selected for scrutiny. The AO while framing assessment order disallowed a sum of Rs. 23,50,446/- u/s 40(a) (ia) due to non-deduction of TDS on the expenses in relation to import of computer software from California. The AO also disallowed Rs. 48,54,215/- on account of difference of loss on Non-Export Oriented Unit, in the assessment order dated 26.12.2011. The AO also initiated penalty. Aggrieved by the order of AO, the assessee filed appeal before the CIT(A) but without any success. Thus, the present appeal is filed before us raising the four grounds of appea....

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....issue show cause regarding the disallowance of expenses in relation to import of software for non deduction of TDS. The assessee furnished its reply (not discussing by AO in its order). The reply of assessee was not accepted by the AO. The AO concluded that right to make a copy of the software and use it for internal business by making copy of the same and storing it on the hard dick amount to use of the copyright. Thus, the contention of the assessee that there was no transfer of any part of copy right was not accepted. Hence, the AO disallowed the amount of Rs. 23,50,446/- (cost of software). During the first appellate stage, the assessee furnished written submission and relied upon a number of decisions on various High Courts and Tribuna....

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.... Ld. AR of the assessee not argued against this grounds of appeal. The Ld DR has no occasion to counter the submission of the assessee. 7. We have considered the order of authorities below. During assessment the AO observed that assessee has incurred expenditure of Rs. 6,56,96,521/- on account of salaries, bonus, allowance, contribution to Provided Fund and other funds for welfare of the employees. These expenses are common expenses for both non-export oriented unit and export oriented unit as no allocation is for both the units provided by the assessee. The AO concluded that he left with no option to appreciate the expenditure in the proportionate of turnover. Hence, the apportionment has been done on the basis of turnover. The turnover o....