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2012 (11) TMI 989 - AT - Income TaxRepairs and Maintenance of Residential flats and office buildings - 'capital expenditure' - held that:- most of the expenditure is incurred on the existing buildings or structures in the nature of repairs for maintenance of the asset as such, except the expenditure incurred on Mohandev Building, item No.8, 9 and 10 listed in the CIT (A)'s order. As seen from the details the amount of Rs. 11.00 lakhs and Rs. 4,85,970/- were incurred in connection with the sofa, recreation central table etc., which seems to be for creation of new assets and cannot be considered as repairs of the existing assets. Likewise the amount of Rs. 3.00 lakhs was spent on electrical fittings and Rs. 1.00 lakhs was spent for design consultancy and supervision charges. Therefore, in our view this expenditure is in the nature of capital expenditure and therefore, we uphold the disallowance to that extent. - AO directed to allow depreciation on capital expenditure - Decided partly in favor of assessee. Disallowance of amount spent on computer software - held that:- this matter should be referred to AO for fresh adjudication in the light of the decision of the Special Bench of the Tribunal in the case of Amway India Enterprises v DCIT, [2008 (2) TMI 454 - ITAT DELHI], as was done in earler years - issue is restored to the file of AO for fresh adjudication in accordance with the law and the principles governing this issue and after giving due opportunity of being heard to assessee. Unclaimed liabilities - accrual of liability or cessation of liability during the year - diference of opening and closing balance of unclaimed liability account - held that:- As and when the parties seek the amount which cannot be recognized as income, assessee is refunding the amount and once client does not seek any adjustment the same is accepted as income of the year after the end of three years limitation period as per assessee's own accounting method. - No reason for supporting the action of AO in bringing to tax the entire credit in the account as income of the year without examining the principles governing the method of accounting followed by assessee and accrual of income. Addition u/s 92CA(3) - selection of comparable - Payment was made for purchase of software for use in the business of advertising and media services. - Assessee claimed deduction u/s 37(1) for purchase of software and reported it as related international transactions. - held that:- determination of ALP at nil cannot be sustained. - assessee could not furnish necessary documents evidencing service - in the interest of justice we restore the issue to the file of TPO to examine the said payment for customized software afresh and determine the appropriate method for arriving at the ALP after giving due opportunity to assessee.
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