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2012 (7) TMI 273 - AT - Income TaxRevenue expenditure versus capital expenditure - expenditure incurred on ERP – Held that:- In case the software becomes obsolete with technological innovation and advancement within a short span of time, it can be said that where the life of the computer software is shorter or say less than 2 years, it may be treated as revenue expenditure - software programme without which the computer cannot work and with the advancement of technology, the programme changes during short period and this change is requirement of the business of the assessee i.e. share - assessee's appeal is allowed Deduction being 150% weighted deduction u/s. 35(2AB) of the Act in respect of capital expenditure on motor cars and interest – Held that:- Capital expenditure incurred by the assessee on purchase of motor cars cannot be considered as expenditure incurred by the assessee on in-house research & development and therefore, the same is not eligible for weighted deduction u/s. 35(2AB) of the Act - capitalized interest on purchase of car is also not eligible for this benefit for same reasons because it is equal or similar to cost of car – Against assessee Disallowance made u/s 14A of the Act - disallowance made merely on the basis of estimation of administrative expenses earned to tax free income - contention of the appellant that earning of dividend income does not require any specific/special administrative efforts, as even where company presumes to have not invested in single penny of money in shares /scripts, company would have to pay salary to its employees – Held that:- Proportionate disallowance u/s. 14A should be limited to only interest liability and not overhead or administrative expenditure, which should be considered for disallowance under Rule 8D of the I.T. Rule, 1962 from 2007-08 - addition made on account of administrative expenses deleted - assessee's appeal is partly allowed.
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