Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2011 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2011 (2) TMI 1414 - AT - Income TaxDisallowance of depreciation - HELD THAT:- We find that the CIT( A) is justified in holding that the assessee had purchased the software and capitalized the cost in asset account. Therefore, he is justified in holding that the payments made by the assessee against purchase of software cannot be held as "Royalty" and deleting the disallowance of depreciation for both the assessment years under appeal. Payments and Services made outside India exception available u/s.09(1)(b) - HELD THAT:- it was held in Ishikawajima-Harima Heavy Industries v. DIT [2007 (1) TMI 91 - SUPREME COURT],that the services which are sources of income sought to be taxed in India must (i) be utilized in India and (ii) rendered in India. In the present case of payments to foreign countries, both the conditions have not been satisfied simultaneously. Therefore, the exception available u/s.09(1)(b) applies to the payments made to the two foreign companies. Hence, the CIT(A) is justified in deleting the disallowance for the asst. year 2005-06 and for the asst. year 2006-07, being the payments made to German company and Singapore company respectively. confirming the disallowance for the asst. year 2005-06 being the payment made to Indian company. Nature of FCCB expenses ''Capital or Revenue'' - HELD THAT:- The assessee company had incurred expenses in connection with the issue of foreign currency convertible bonds. The assessing authority held that the bond holders had the option to convert the bonds to equity shares and therefore, the collection of funds through the issue of bonds needs to be treated as to increase the capital and therefore the connected expenses would be capital in nature and hence disallowed. Quantum of benefit available u/s010A - HELD THAT:- It is held in ITAT, SAK Soft Ltd.,[2009 (3) TMI 243 - ITAT MADRAS-D], that the exclusion must be made from total turnover as well. Therefore, we direct the AO to exclude the telecommunication charges from total turnover as well and revise the computation of the quantum of benefit available u/s010A.
|