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2016 (6) TMI 592 - AT - Income TaxExpenditure on Software Licence Fees - revenue v/s capital - Held that:- In the light of the factual and legal matrix of the case and respectfully following the ratio of the decisions of the Hon'ble Bombay High Court in the case of Raychem RPG Ltd. (2011 (7) TMI 953 - Bombay High Court ) and Amway India Enterprises (2008 (2) TMI 454 - ITAT DELHI-C ) and the finding of facts rendered in the assessee’s own case for A.Y. 2010-11 we hold and direct that out of expenditure claim for software licence fees amounting to ₹ 60,35,642/-, the amount of ₹ 55,57,875/- (i.e. ₹ 60,36,642/- less ₹ 4,77,767/-) is incurred in respect of application software acquired which is in the nature of revenue expenses. The remaining expenditure of ₹ 4,77,767/- paid to Fadv Corporation for acquiring True UP Licences Fees being for a period of 36 months is held to be expenditure capital in nature as it results in enduring benefit to the assessee and we direct the AO to allow the assessee eligible depreciation thereon in accordance with law. Foreign Exchange Loss - Held that:- On an appreciation of the facts of the case on hand, it is seen that the foreign exchange loss has arisen on account of trade transactions entered into by the assessee and is with respect to the revaluation of foreign currency sundry debtors and creditors as on 31.03.2009. In our view, the claim of the assessee in the case on hand in respect of loss on account of foreign exchange sundry debtors and creditors is allowable as it is covered in favour of the assessee by the decision of the Hon'ble Apex Court in the case of CIT vs. Woodward Governor India P. Ltd. (2009 (4) TMI 4 - SUPREME COURT ).- Decided in favour of assessee. Software Expenses - revenue v/s capital - Held that:- Since the expenditure was incurred for purchase of Windows XP Professional, an application software for its office use and becomes obsolete very fast, it cannot be treated as capital asset and therefore the same is to be treated and allowed as revenue expenditure.- Decided in favour of assessee.
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