TaxTMI 
TaxTMI 
2015 (11) TMI 1893
X X X X Extracts X X X X
X X X X Extracts X X X X
....ions/ disallowances:- (i) "Disallowance of software expenses claimed as revenue expenditure aggregating to Rs. 11,47,520/- which has been treated as capital in nature. (ii) Disallowance of Rs. 84,50,557/- on account of provision of expenditure to be reimbursed to the parent/group company in connection with software allocation cost on the ground that deduction of tax at source u/s 195 r.w.s. 194J has not been made and consequently, 40(a)(i) has been made. (iii) Disallowance of Rs. 5,07,500/- on account of replacement of old monitors of Rs.5,07,520/- and Artificial Carpet Charges of Rs. 1,13,453/- on the ground that the same is not covered by the definition of 'current repairs'. 2. The brief facts of the case are....
X X X X Extracts X X X X
X X X X Extracts X X X X
....st 6,93,959 4 Software License Cost (Toad Software Development Tool) 31,120 5 3D Research Cost 1,49,199 6 Research Software Cost (Radio Monitoring Software) 30,928 Total (Rs.) 11,47,520 3. The Ld. CIT(A), too upheld the action of the AO on the ground that it has an enduring benefit. 4. Before us, the Ld. Counsel submitted that this issue had come up for consideration before the Tribunal in assessee's own case for the assessment year 2006-07. 5. After hearing the parties and on perusal of the impugned order, we find that these software license costs which has been paid by the assessee is for using of software for its day-to-day business requirements, as stated by the assessee before the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e held that TDS should have been deducted by the assessee while making the payment, which has not been done and therefore, disallowance u/s 40(a)(i) has been made. The Ld. CIT(A) too has confirmed the said addition on the following reasons :- "The amount paid towards purchase of Software is Royalty as held in the case of CIT (Int.Tax) vs Samsung Electronics Co. Ltd 320 ITR 209 (Mum). The appellant has produced the bills of Mindshare Asia Pacific have not been produced to prove that what Mindshare Asia Pacific have not been produced to prove that what Mindshare Asia Pacific has changed is merely the reimbursement of actual software cost. Without prejudice the amount has been paid towards purchase of software either....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ding consideration for the sale, distribution or exhibition of cinematographic films; or (vii) There is a no rendering of any services in connection with the activities referred to in sub-clauses (i) to (vi); Thus, there is no requirement of deducting TDS either u/s 195 or u/s 194J. The Ld. Counsel further referred to the details of software cost allocated on cost sharing basis and also the nature of such software as given in the paper book and submitted that these softwares were procured centrally for all the group entities for better and coordinated functioning. She also drew our attention to the details of software expenses allocated by Parent Company along with the internal debit invoices. Thus, she submitted that, it cannot....