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2015 (4) TMI 150 - ITAT MUMBAIDisallowance of expenditure for purchase of license for windows - Held that:- The expenditure are incurred for the purchase of application software and therefore are revenue in nature. Windows being application software cannot be treated as capital assets and therefore any license fee paid for the purchase of windows has to be allowed as revenue expenditure as the software has to be updated every year. We accordingly set aside the findings of the ld.CIT(A) and direct the AO to delete the addition. - Decided in favour of assessee. Disallowance of prior period expenses - Held that:- Since fraud and financial irregularities were detected during the year under consideration. The claim of such financial irregularities has to be allowed during the year under consideration itself. We find that the complete details of transactions were submitted by the assessee before the AO. The AO did not care to verify the same. The assessment order pertains to assessment year 2005-06 and we are entering in the assessment year 2015-16. Ten years have since been lapsed, it would be gross injustice to the assessee, if we restore this issue to the file of AO for verification of the details. Considering the details and judicial decisions, we set aside the findings of the ld. CIT(A) and direct the AO to delete the addition of Rs. ₹ 2,66,59,853/- - Decided in favour of assessee. Disallowance of foreign exchange fluctuation treated it as capital loss - Held that:- The ratio laid down by the Hon’ble Supreme Court in the case of Sutlej Cotton Mills Ltd (1978 (9) TMI 1 - SUPREME Court) squarely apply on the facts of the present case, wherein held that “Where profit or loss arises to an assessee on account of appreciation or depreciation in value of foreign currency held by him, on conversion into another currency, such profit or loss would ordinarily be trading profit or loss if foreign currency is held by assessee on revenue account or as a trading asset or as part of circulating capital embarked in business. But, if on the other hand, the foreign currency is held as a capital asset or as fixed capital, such profit or loss would be of capital nature.” Thus we direct the AO to delete the addition - Decided in favour of assessee. Addition under section 40(a)(ia) - non deduction of tds - CIT(A) deleted the addition - Held that:- CIT(A) has very rightly appreciated the documentary evidence and the details submitted by the assessee and found that most of the expenses were reimbursement and in some of the cases the assessee has obtained no deduction certificate from the respective AO and wherever the TDS was applicable, the assessee has deducted the same.. We have also considered the documentary evidence and after perusing the details as submitted by the parties concerned, we do not find any reason to interfere with the findings of the ld. CIT(A). - Decided against revenue. Addition of capital expenditure - CIT(A) deleted the addition - Held that:- The assessee has incurred expenditure on repair and maintenance and no new assets has been brought in to existence. As no distinguishing facts have been brought on record by the ld.DR, we do not find it necessary to interfere with the order of ld.CIT(A). - Decided against revenue. Disallowance of advertisement expenditure - CIT(A) deleted the disallowance - Held that:- It is an undisputed fact that the advertisement expenses have been incurred by the NPIL. It is also an undisputed fact that the assessee has simply credited it to the account of NPIL as reimbursement of the expenditure. It is further found that NPIL has made TDS on the advertisement expenses. All that being the facts of the matter, we do not find any reason to interfere with the finding of the ld CIT(A). - Decided against revenue. Expenditures paid to various vendors without TDS - CIT(A) deleted the addition - Held that:- The assessee once again explained the nature of transaction and the misappropriation done by the employee of the assessee. After considering the facts and the submissions, the ld. CIT(A) was of the firm belief that loss is required to be allowed in the year in which it was detected. The ld. CIT(A) correctly deleted the entire addition drawing support from the decision of Associated Banking Corporation Of India Limited (1964 (10) TMI 7 - SUPREME Court) and Badridas Daga (1958 (4) TMI 2 - SUPREME Court) - Decided against revenue.
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