TaxTMI 
TaxTMI 
TaxTMI 
2022 (7) TMI 32
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....come Tax Act, 1961 (hereinafter the 'Act') vide orders dated 10.12.2008 & 27.11.2009 respectively. 2. At the outset, it is noticed that this matter is restored back by Hon'ble Madras High Court in T.C.A. Nos.134 and 135 of 2012, vide order dated 16.09.2020 restored back only the issue raised before Hon'ble High Court i.e., vide Question No.2, which reads as under:- 2. Whether on the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in restoring the issue with regard to amortization of capital expenditure to the file of the assessing officer for fresh adjudication in the light of the Special Bench decision in the assessee's own case when the issue of disallowance of amortised business acquisition expense....
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....or adjudicating this issue first of all we should consider what is "software"and what is "technical services". Explanation (ii) to sub- section 9A of Section 10B defines computer software. Explanation reads as under: Clause (ii) "computer software"means (a) any computer programme recorded on any disc, tape, perforated media or other information storage device; or (b) any customized electronic data or any product or service of similar nature as may be notified by the Board, which is transmitted or exported from India to any place outside India by any means; Clause (iii) of Explanation (2) to sub-section 9A of Section 10B defines export turnover as under: "(iii) "export turnover" means the consideration in respect of export (by....
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....ng Officer with reference to the Special Bench as quoted above." The Hon'ble Madras High Court has set aside the above question No.2 to the Tribunal for deciding the issue once again on merits and in accordance with law after giving opportunity to both the sides. 3. This matter was fixed for hearing on number of occasions but none was present for assessee. Hence, we proceeded to decide this issue ex-parte qua the assessee for the reason that this is a very old matter pertaining to appeals filed in 2011. Identical is the issue in both the years. Hence, will take the facts from assessment year 2006-07. The grounds raised by Revenue i.e., Ground Nos.2.1 & 2.2 reads as under:- "2. The learned CIT(A) has erred in deleting the addition made ....
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....e to the accounts spread over for five years as per Accounting Standards. The cost was spread over a period of five years as deferred revenue expenditure and accordingly booked expenditure and proportionately claimed as expenses by US branch of the assessee in the profit & loss account. But, the AO noted that the assessee has acquired business of two companies namely JDAN Systems & ImpekSoft Inc for a total consideration of Rs.13,86,49,848/- for which a sum of Rs.4,59,18,900/- was paid towards advance. The balance amount was paid in installments up to September, 2005. According to AO, the said amount was amortized over a period of five years and during the year, amount claimed was Rs.1,38,64,985/- i.e., amortization for six months charged t....
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....e as well as reasons given by the AO for the disallowance. I find that the appellant has basically acquired the ongoing business contracts of those companies with their clients for software development along with the technical resources like employees etc. to execute contract. As has been pointed out by the appellant no capital assets has been acquired. It is in the nature of expenditure incurred for more business or expansion of business and in the process they have ensured that those three companies do not further enter into business on the same line with those clients. I am inclined to accept the contention of the appellant that it is more in the nature of revenue expenditure. I agree that the acquisition of business contracts along with....