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2019 (2) TMI 993 - AT - Income TaxNature of expenditure - expenditure incurred by the assessee on acquiring licenses to use the software - whether it did not confer any enduring benefit on the assessee and has to be allowed as deduction under section 37 (1)? - Held that:- Hon’ble jurisdictional High Court in the cases of Oriental Bank Of Commerce [2018 (4) TMI 1534 - DELHI HIGH COURT] and ACL Wireless Ltd [2013 (12) TMI 1160 - DELHI HIGH COURT] a coordinate Bench of this Tribunal reached a conclusion that the expenditure incurred by the assessee on acquiring licenses to use the software which did not confer any enduring benefit on the assessee and has to be allowed as deduction under section 37 (1) of the Act. It is not the case of the revenue that there is any change of facts and circumstances involved in these two assessment years. There is no reason as to why we should not follow this line of decisions which are applicable to the facts of the case on hand. - Decided in favour of assessee. Disallowance on account of advertisement and marketing expenses - nature of expenditure - Held that:- Since the genuineness of the expenditure is not in dispute and the dispute is only regarding capital or revenue expenditure in nature decided the issue in favour of the assessee holding that the expenditure incurred by the assessee on glow sign boards and a neon sign boards is revenue in nature and allowable as deduction under section 37 (1) of the Act. Depreciation on POS terminals - Assessee claimed depreciation on POS terminals at 60% by treating the same as part of block of assets “computers” whereas the learned assessing officer treated the same as part of Plant and Machinery block and allowed depreciation at 15% - Held that:- As in assessee's own case Tribunal followed the decision in the case of Connaught Plaza restaurants [2014 (9) TMI 1105 - ITAT DELHI] wherein the issue of higher rate of depreciation on POS terminals was considered and the decision of the Tribunal granting 60% depreciation thereon was upheld. In the said decision Hon’ble jurisdictional High Court noticing that the CIT(A) in assessee’s own case for the assessment year 2008-09 held that the assessee was entitled to the depreciation at 60% on the ground that the equipment was akin to a computer and such a finding was concurred by the ITAT. Disallowance of depreciation on UPS - whether depreciation could be allowed at 60% as claimed by the assessee treating it as the computer periphery or at 15% as restricted by the learned assessing officer by treating it as falling within Plant and Machinery block - Held that:- DR placed reliance on the decision in the case of Nestlé India Limited vs. DCIT [2007 (4) TMI 299 - ITAT DELHI-F] wherein the Tribunal held that the depreciation on UPS is not to be allowed at 60%. However subsequently there are many decisions on this aspect and more particularly the Hon’ble Delhi High Court in the case of CIT vs. BSES Yamuna Power Ltd [2010 (8) TMI 58 - DELHI HIGH COURT] held that UPS forms part of the computer periphery and depreciation at a 60% is allowable. In view of this settled position by the said judgement, we do not find any merits in the contention of the revenue. Disallowance u/s 14A - Held that:- In view of the decisions of the jurisdictional High Court in the cases of Ld. PCIT vs. McDonalds India Ltd [2018 (11) TMI 1057 - DELHI HIGH COURT], Cheminvest Ltd vs. CIT (2015 (9) TMI 238 - DELHI HIGH COURT) and Ld. PCIT vs.IL & FS energy development company Ltd ( [2017 (8) TMI 732 - DELHI HIGH COURT] in the absence of any exempt income earned by the assessee in the financial year relevant to the concerned assessment year, no disallowance could be made under section 14 A of the Act. Issue is no longer res Integra and well settled by the aforesaid judgements
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