TaxTMI 
TaxTMI 
2022 (11) TMI 1293
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.... 27, 2018, which is fixed for hearing on September 17, 2019. In relation to the same, the assessee raised an additional ground in the captioned appeal. The ld.AR requested to admit the additional ground for reason that during the course of the impugned proceedings, the assessee had challenged the re-opening of assessment under section 148 of the Act, as the same was based on audit objection raised and not based on any fresh material. He further stated that this claim is already covered in the Ground 2.1 in the original grounds of appeal filed by the assessee, however in order to include a specific ground on this contention, the assessee wishes to include the same as a separate ground of appeal. The Ld.AR further submitted that that all facts relevant for adjudication of the additional ground is placed on record before the Hon'ble ITAT. He relied on the following decisions for admissibility of additional grounds:- Jute Corporation of India [1991] 187 ITR 688 (SC) National Thermal Power Co Ltd (229 ITR 383 (SC) Pruthvi Brokers & Shareholders [TS-463-HC-2012 (BOM)] The assessee hs raised the additional ground regarding reopening, which reads as under:- Reopening of assess....
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....cessing charges : Rs. 668741.00 Rs.441985228.93 The assessee was not engaged in the production of computer software. So, excluding the expenditure on computer stationery, EDP consumables and data processing charges, the other expenses relating to Software Development Charges (Rs. 66378056) and IST expenses SLE (RS. 352984204) needs to be considered as capital expenditure only. Further, these payments are intended for enduring benefit. The claim of the assessee shall be disallowed and brought to taxation. 2. The assessee had deducted an amount of Rs.44,21,19,000 towards relocation expenses. The expenses were incurred in respect of the following three facilities which were relocated. Factory at Kolkata to Baroda Factory at Bangalore to Hosur Factory at Perungudi to Padappai The moving out expenses relates to the existing facility being located to another location for ease of administration. In this case the shifting of the factory produced an enduring advantage in the shape of transfer to a better factory site, an advantage which enabled the trade to prosper and an advantage that could be expected to last forever. Hence the expenditure claimed towards relocation....
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....ppeal before the Tribunal. 6. Before us, the ld.AR drew our attention to the letter issued by Principal Director of Audit (Central) vide No.PDA(C)/Legal/25- 02(202)/2019-20/82 dated 19.08.2019 supplying the information u/s.RTI Act giving the details of Revenue audit objection in respect of assessee's case for relevant assessment year 2010-11 as under:- Sl.No. Information Sought Information furnished 1 Copy of the Revenue Audit Objection Two audit observations were raised in respect of M/s GE T&D India Ltd (formerly known M/s Areva T&D India Ltd and were issued as para No.11/IIA and Para No.20/IIA in LAR No. 11/87-62/20 14-15 runing to 5 pages is enclosed 2 Copy of the report sent by the Commissioner of Income tax concurring/denying with the method followed by the Company and accepting/not accepting the view expressed by the Revenue Audit or otherwise Copy of communications, sent by Income Tax Department to this office with respect to Para No.20/IIA runs to 3 pages is enclosed. No reply has been received in this office from the department with reference to the Para No. 11/II A issued in LAR No. l1/87-62/2014- 15. 3 The Final decision taken by the Revenue Audit (C&AG) in ....
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....004680.46 IST expenses SLE : Rs. 352984203.90 EDP consumables : Rs. 20944585.07 PC Software : Rs. 4962.50 Data processing charges : Rs. 668741.00 Rs.441985228.93 The assessee was not engaged in the production of computer software. So, excluding the expenditure on computer stationary, EDP consumables and data processing charges, the other expenses relating to Software Development Charges (Rs. 66378056) and IST expenses SLE (Rs. 352984204) needs to be considered as capital expenditure only. In reply, it was stated that the software development charges were routine .....nce expenses towards ERP software like SAP. As regards IST expenses, it was ....... that the assessee had entered into an Information Technology Sharing Service Agreement with Alstom Grid SAS of France. According to the agreement, the foreign company was required to extend services in tge following areas:- (a) WAN- This is a network designed for data transfer between all group companies, connection to all global applications of the company and intranet and internet traffic. (b) Lotus Notes- Messaging system- This is Alstom Group's messaging system for email communication between the Group c....
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....pment that help in transmission and distribution of power, commissioning and servicing of transmission and distribution system is provided to the Indian entity which applied in running the business of the Applicant and the employees of the Applicant would get equipped to carry on these systems on their own without reference to the French company, when the IT Agreement comes to an end, It is not as if for making available, the recipient must also be conveyed specifically the right to continue the practice put into effect and adopted under the agreement on its expiry. We are of the view that the services provided under the IT Agreement are in the nature of Fees for Technical Services and taxable under the DTAA as well as under the Act". Since the AAR decided that the payment is intended for enduring benefit and also has ordered to tax the same as Fees for Technical Services, it is obvious that the expenditure needs to be classified under capital expenditure only. Copies of the following key documents were not furnished to audit:- (a) Assessment order for the AY 2010-11 (b) Statement of computation of income (c) Profit & Loss Account, Balance sheet and schedules there unde....
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.... to the setting up of a new industrial undertaking at Pondicherry which was an expansion of the existing business of the assessee. It is to be mentioned that the Madras High Court in CIT vs. Lyord Super Fabrics (308 TTR 78) has held that the expenditure incurred on shifting the factory premises under compelling circumstances, viz., for very survival of the, factory itself could be allowed as revenue expenditure. But, in the case of the assessee, the moving out expenses relates to the existing facility being located to another location for ease of administration. The Hon'ble Supreme Court in Sitalpur Sugar Works Ltd (49 ITR 160) held that the shifting of the factory produced an enduring advantage in the shape of transfer to a better factory site, an advantage which enabled the trade to prosper and an advantage that could be expected to last for'ever. 6.4 The ld.AR for the assessee in view of the above stated that the audit objection is the only reason and AO has nowhere applied his independent mind while recording evidence as is evident from the audit objection above reproduced and the reasons recorded which are exactly matching. The ld.AR stated that this issue is squarely....