TMI Blog2014 (6) TMI 573X X X X Extracts X X X X X X X X Extracts X X X X ..... o make disallowance by observing that the assessee purchased some software against which the subscription/fee was paid - without examining the actual detail of such expenses, the AO went on to make addition - the details of expenses which do not relate to software purchase as was made out by the AO, were sent to him for remand report - he considered it expedient not to offer any comment. There was no reason to deviate from the finding recorded by the CIT(A) that such expenses were not for software purchase but revenue in the nature towards fees and subscription – Decided against Revenue. Addition of communication and travelling expenses – Held that:- The AO was not justified in disallowing the entire expenditure of ₹ 1.25 crore me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee had deducted tax at source @ 10% on the Management fee which was deposited on 16.07.2009. He, therefore, deleted the disallowance after calling for the remand report from the AO. The Revenue is aggrieved against such deletion of addition. 3. After considering the rival submissions and perusing the relevant material on record, it is noticed that the disallowance has been made and sustained for non-deduction of tax at source on the management fee, which is presently disputed. The ld. CIT(A) deleted the addition by observing that the assessee deducted and paid tax on time. However, we find from the copy of account of the payee, that there is no deduction of tax at source. The ld. AR stated that the assessee was liable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... milar claim made for the preceding year at Rs. 1,26,283/-. The AO noticed that the assessee purchased some software against which subscription/fee was paid. As software is a capital asset, the AO held that such amount was not liable to be allowed as revenue expenditure. Since the total claim of Rs. 17.97 lac included a sum of Rs. 1,85,727/- pertaining to the earlier year which was already added back by the assessee in computation of total income, the AO made addition for the remaining sum of Rs. 16,12,058/-. The ld. CIT(A) deleted this addition by observing that the AO erred in considering the nature of expenditure which was not towards the purchase of software, but the amount spent on registration fee, basic training of employees, subscrip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce expenses claimed by the assessee as deduction for the current year were much higher than those claimed in the preceding year. He, therefore, disallowed the entire sum of Rs. 1.25 crore. The ld. CIT(A) overturned the assessment order on this point and ordered for the deletion of addition by considering the details furnished by the assessee and also the remand report. 7. After considering the rival submissions and perusing the relevant material on record, we find that the AO was not justified in disallowing the entire expenditure of Rs. 1.25 crore merely on the ground that this expenditure was excessive in comparison with the preceding year. He observed that the assessee did not file any details of such expenses, but it can be seen fro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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