Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (3) TMI 1292 - AT - Income TaxNature of expenditure on software - revenue or capital - Held that:- The issue is also covered in favour of the assessee by the decision of the Hon'ble Bombay High Court in the case of Raychem RPG Ltd. (2011 (7) TMI 953 - Bombay High Court) wherein it was held that software facilitate assessee’s trading operations or enable the management to conduct assessee’s business more efficiently or more profitably but it is not in the nature of profit-making apparatus. Therefore, expenditure on software was to be allowed. In the instant case also, assessee was in the business of shipping agent, software was used to facilitate assessee’s business of shipping, therefore, there is no reason to treat the expenditure on software as capital. Addition of closing balance of CENVAT credit on account of unutilized service tax credit u/s 145A - Held that:- Tssue with regard to applicability of Sec. 145A on unutilized service tax credit was considered by the Tribunal in assessee’s own case [2015 (8) TMI 312 - ITAT MUMBAI] as held this section only applies to purchase and sale of goods and inventory for the purpose of valuation of stock on the date of valuation. In the normal circumstances it is at the time of valuation of closing stock and not for the valuation of service contracts. If the provision of section 145A is not applicable on services, then the action of the AO in invoking the provisions of section 145A to make the addition is legally not correct. Accordingly on this reason, the order of the Ld. CIT(A) is set aside and the addition made by the AO is deleted. Disallowance u/s 14A - Held that:- As there was no exempt income during the year under consideration, therefore, no disallowance should be made. See case of Cheminvest Ltd. [2015 (9) TMI 238 - DELHI HIGH COURT] wherein it was held that no disallowance u/s 14A should be made when there is no exempt income during the year. Thus we delete the disallowance made u/s 14A of the Income Tax Act, 1961. - Revenue appeal dismissed.
|