Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2015 (7) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (7) TMI 740 - HC - Income TaxExcessive depreciation for the UPS and Inverters - Held that:- As it is sought to be urged by the Revenue that under Section 32(1) unless the assessee was able to show that the concerned UPS and computer peripherals have been used for more than 180 days in the previous year, it could not have claimed higher rate of depreciation @ 60%. The Court finds that the above ground urged by the Revenue ought to have been based on the factual determination as to whether with reference to the actual dates of purchase of the concerned UPS and computer peripherals, it could be demonstrated that the assessee could not have used such UPS and computer peripherals for more than 180 days in the relevant previous year. However, no such factual determination appears to have been undertaken either by the Assessing Officer (AO) or, at the instance of Revenue, at any of the subsequent stages. Consequently, the Court finds no merit in the contention of the Appellant as regards the issue of depreciation. - Decided against revenue. Fees and royalties for technical knowhow - whether be treated as revenue/business expenditure? - Held that:- A perusal of the TCA shows that the payment by the Assessee to SMCL is for the technical knowhow given to the Assessee as a Licensee. Although the payment is spread over a period of 10 years, it does not make the Assessee the owner of the technical knowhow. The very nature of the license agreement is that it is not of a permanent nature. The view taken by the CIT (Appeals), and concurred with by the ITAT, cannot in the circumstances be said to be improbable or contrary to the settled legal position. The Court, therefore, concurs with the view of the CIT (A) and the ITAT that the benefit to the Assessee as a result of payment of royalty for technical knowhow was not of an enduring nature, and therefore cannot be construed to be a capital expenditure.
|