2021 (9) TMI 1151

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....2013 for the assessment years 2007-08 and 2008-09. 2. The above appeals were admitted on 14.07.2015 on the following substantial questions of law :- 1. Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the software expenses incurred by the assessee were revenue expenditure? 2. Is not the finding of the Tribunal bad by holding that the claim of license fee on software expenses paid to its parent company was for the utilization of the software which gave a enduring benefit and therefore capital in nature? 3. Heard Mrs. R.Hemalatha, Learned Senior Standing Counsel appearing for the appellant-Revenue and Mr. R.Sivaraman, Learned Counsel for the respondent-assessee. 4. The assessee is engage....

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....plying the functional tests by relying upon the decision of the Hon'ble Supreme Court in Tata Consultancy Services Ltd -vs- State of Madhya Pradesh reported in 271 ITR 401 (SC). Accordingly, the Assessing Officer relies on the decision of the ITAT, Delhi in the case of Amway India Ltd. -vs- Deputy Commissioner of Income-tax, Circle1(1), New Delhi reported in 2009 27 SOT 344 (Delhi). 6. Aggrieved by the same, the assessee preferred appeals before the Commissioner of Income Tax (Appeals)-IX, Chennai (CIT), who by orders dated 27.12.2012 allowed the assessee's appeals, after noting the decision of the Tribunal in the assessee's own case for the assessment year 2005-06 in I.T.A.No.612/Mds/2011, dated 09.05.2012. 7. Aggrieved by th....

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....y new system of facility of enduring nature. 10. In such circumstances, we find that the Tribunal was right in confirming the order passed by the CIT(A). We note the decision, which was referred to by the Tribunal in the case of CIT Vs. Raychem RPG Ltd. reported in [2012] 21 Taxmann.com 507 (Bombay). Wherein the ERP package software, which facilitated the assessee's trading operation to conduct its business more efficiently or more profitably but was held to be not in the nature of 'profit-making apparatus' and the software expenditure was allowable as revenue expenditure. 11. With regard to the license fee, which was for acquiring a software license of shelf life of less than two years was held to be as allowable as revenue expen....