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2014 (4) TMI 107 - AT - Income TaxTDS on V-ST charges – Deletion of disallowance u/s 40(a)(ia) – Held that:- payment of V-SAT charges covered by decision of Bombay High Court in CIT v/s Kotak Securities Ltd. [2011 (10) TMI 24 - Bombay High Court] - Therefore, there was no requirement for deducting TDS and consequently no disallowance under section 40(a)(ia) can be made - Set aside issue of transaction charges to file of Assessing Officer, to verify, whether in earlier years transactions charges have been paid and any disallowance has been made in earlier years or not - If assessee has paid transaction charges in earlier years and no disallowance has been made by Department, then in view of the decision of Jurisdictional High Court in case of Kotak Securities Ltd. [2011 (10) TMI 24 - Bombay High Cour ] no disallowance should be made in this year because in that way it constitute a reasonable cause for not deducting TDS in this year also - Matter is restored to file of Assessing Officer - Decided partly in favour of Revenue. Disallowing Expenditure as capital expenditure - software expenditures - Held that:- software application expenses are nothing, but up-gradation of efficient working of operations through computers in day-to-day business management, which keeps on changing periodically and thus any expenditure on such an upgradation or buying of software is revenue expenditure only - Even though Rules have provided rate of depreciation on computer software, but that does not lead to any kind of drawing legal inference that all softwares have to be characterized as capital asset - Grounds raised by assessee in cross objection treated as allowed - Decided in favor of assessee.
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