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2015 (11) TMI 68 - AT - Income TaxAddition on account of license fees, connectivity charges and co-ordination charges for the use of Vision plus software - revenue v/s capital expenditure - Software only is not the soul of assessee’s business as argued by the ld. DR. - Held that:- In the case of southern Switchgear Ltd. (1997 (12) TMI 105 - SUPREME Court ), the technical knowledge and information remained with the assessee even after termination of agreement which constituted enduring benefit to the assessee whereas in the present case, the software in question is an application software and after termination of license agreement, said software was to be delivered back to the licensor and the same cannot be made to use by the assessee in any manner. Similarly in the case of Jones Woodhead and Sons (1997 (2) TMI 4 - SUPREME Court) relied on by the Assessing Officer is also distinguishable on facts inasmuch as in that case the agreement between the assessee and the foreign collaborator was in relation to setting up of a new business and the foreign collaborator besides furnishing information and technical know-how, rendered valuable assistance in setting up of the factory itself. No such situation arises in the present case. In view of this discussion and relying on various decisions cited by assessee, we are of the considered opinion that the license fee etc. paid by the assessee to M/s. GECC(USA) is revenue expenditure deductible u/s. 37 of the Act. Decided in favour of assessee. Depreciation @ 60% on printer, switches, networking equipments, batteries, pen drives etc. - Held that:- A perusal of impugned order shows that the ld. CIT(A) after following direct decision of jurisdictional High Court in the case of M/s. BSES Rajdhani Powers Ltd. [2010 (8) TMI 58 - DELHI HIGH COURT ] has observed that the matter is already settled and the printers, switches, networking equipments, UPS and pen drives are held as integral part of the computer system and hence eligible for depreciation @ 60%. - Decided in favour of assessee.
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