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2016 (1) TMI 452 - AT - Income TaxDisallowance of software expenses - revenue v/s capital expenditure - AO treated the same as capital expenditure and allowed depreciation to the income of the assessee whereas CIT(A) treated as revenue expenditure - Held that:- Commissioner of Income Tax (Appeals) observed that the Hon'ble Delhi High Court in the case of CIT Vs. G.E. Capital Services Ltd. [2007 (7) TMI 185 - DELHI HIGH COURT] has held that expenditure incurred by the company on computer software, which was not customized software and said software required frequent up-gradation and hence, it was held as revenue expenditure. The Commissioner of Income Tax (Appeals) also noted that the Hon'ble Madras High Court in the case of CIT vs. Southern Roadways Ltd. [2006 (10) TMI 82 - MADRAS HIGH COURT ] held that up-gradation of computers by changing certain parts thereby enhancing the configuration of the computers for improving their efficiency without making any structural alternations is not change of an enduring nature. He also observed that in assessee's own case, in assessment year 2007-08 has held that if the expenditure has been incurred by the assessee for up-gradation of the software, the expenditure has to be allowed as a revenue expenditure and if the expenditure has been incurred for the first time for acquiring this software, the expenditure is to be treated as capital expenditure, therefore, he deleted the disallowance made by the Assessing Officer. - Decided against revenue Addition on excess interest - CIT(A) deleted the addition - Held that:- No material was brought on record by the Departmental Representative to controvert the finding of the Commissioner of Income Tax (Appeals) that no non-business utilization of the loan fund or diversion was proved by the Assessing Officer and disallowance of interest made was without any basis. In absence of any material being brought on record, we find no good reason to interfere with the order of the Commissioner of Income Tax (Appeals) which is after considering the entire facts of the case of the assessee. Hence, we confirm the order of the Commissioner of Income Tax (Appeals) - Decided against revenue
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