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2016 (8) TMI 69 - AT - Income TaxNon granting 100% depreciation on software purchase - Held that:- In this case, the assessee acquired the software for the purpose of its business and it is a intangible asset under clause (iia) to sec.32(I) of the Act. Thus, outright acquisition of computer software is nothing but acquisition of know-how and relevant expenditure is a capital expenditure. This software falls in the new entry was introduced as Sl. No.iii(5) in Part-A of the Table of rates for the depreciation in Appendix-I in respect of computer including computer software. In view of the above, we have no doubt in our mind that software acquired by the assessee is “intangible” within meaning of clause (ii) to Sec.32(I) of the Act and the CIT(A) considering the above observed that it is an intangible asset entitled for depreciation @ 60% and being the software used by the assessee during the second half of the relevant previous year and granted deduction at 30% and the same is confirmed. - Decided partly in favour of assessee Disallowance of deferred revenue expenditure written off - Held that:- The expenditure is not relating to the assessment year under consideration and it was incurred prior to the commencement of the assessee’s business and it is prior period expenditure and the assessee placed reliance in the judgement of M/s.Madras Industrial Investment Corporation Ltd. Vs. CIT (1997 (4) TMI 5 - SUPREME Court ) have no relevance. Since the expenditure is wholly and exclusively laid out for the purpose of marketing of the business of the assessee in earlier assessment year, it cannot be allowed as revenue expenditure during the assessment year under consideration as this expenditure is not related to the assessment year 2004-05.- Decided in favour of revenue TDS u/s 195 - disallowance u/s.40(a)(ia) in respect of amounts paid by the assessee to in foreign currency towards advance for purchase of software, without deduction of tax at source - Held that:- Since we have already held the purchase of software is an intangible asset and the assessee is entitled for depreciation in the assessment year 2004-05, applying the same ratio we are of the opinion that being the purchase of software, it cannot be liable for TDS in view of the judgement of Supreme Court in the case of G.E.India Technology Centre P Ltd Vs. CIT reported in [2010 (9) TMI 7 - SUPREME COURT OF INDIA ].- Decided in favour of assessee
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