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2019 (4) TMI 93 - AT - Income TaxDisallowance of expenditure u/s 37 - under the head “interest paid on delayed payment of taxes, personal use of telephone, PWC Global Services Charges & Software licence fee” - HELD THAT:- As regards the issue relating to disallowance of interest paid on delayed deposit of service tax, it is observed that a similar issue involved in the case of DCIT –vs.- M/s. Webel Consumer Electronics Limited [2012 (12) TMI 1178 - ITAT KOLKATA] decided in favour of the assessee wherein interest paid on delayed payment of sales tax was held to be a deductible expenditure by the Tribunal. Also see M/S PRICEWATERHOUSECOOPERS PVT. LTD. VERSUS ACIT, CIRCLE-2 (2) , KOLKATA [2018 (9) TMI 1812 - ITAT KOLKATA] - we uphold the impugned order of the ld. CIT(Appeals) deleting the disallowance made by the Assessing Officer on account of interest paid by the assessee on delayed payment of service tax. Adhoc disallowance of telephone expenditure - HELD THAT:- As observed that a similar disallowance made by the Assessing Officer in the case of ACIT – vs.- Price Water House [2018 (9) TMI 1812 - ITAT KOLKATA] was deleted by the Tribunal holding that the adhoc disallowance made by the Assessing Officer on the basis of presumption without bringing any material evidence on record to show the personal use of telephone was not sustainable. Disallowance of PWC Global Service Charges - similar issue has been decided by the Tribunal in favour of the assessee in the case of M/s. Price Water House Coopers Pvt [2018 (9) TMI 1812 - ITAT KOLKATA] uphold the impugned order of the ld. CIT(Appeals) allowing the claim of the assessee for deduction on account of PWC Global Service Charges. Software licence fees - HELD THAT:- Allowing the deduction claimed by the assessee on account of software licence fees paid to M/s. Wipro Limited. Non-refundable grant - business receipt OR income from other sources - HELD THAT:- matter needs re examination by the Assessing Officer as the matter was decided by him with reference to the agreement dated 01.07.1998 and not with reference to the agreement dated 16.03.2011, which was referred to and relied upon by the ld. CIT(Appeals). As already observed by us, it is relevant to ascertain for deciding the exact nature of the non-refundable grant received by the assessee from the PWC BV as to whether the same was received as per the agreement dated 01.07.1998 or as per the agreement dated 16.03.2011. As observed by us while determining the nature of receipt, one should be guided by the terms of the agreement genuinely entered into between the parties. We, therefore, set aside the impugned order passed by the ld. CIT(Appeals) giving relief to the assessee on this issue and restore the matter to the file of the Assessing Officer for deciding the same afresh after considering both the agreements dated 01.07.1998 and 16.03.2011 Disallowance on account of partner’s remuneration under section 40(b)(v) - HELD THAT:- The issue involved in Ground No. 2 is consequential to the main issue involved in Ground No. 1 and since the issue in Ground No. 1 was decided by the ld. CIT(Appeals) in favour of the assessee by his impugned order, he allowed the consequential relief to the assessee on the issue involved in Ground No. 2. Since we have set aside the impugned order passed by the CIT(Appeals) giving relief to the assessee on the main issue involved in Ground No. 1 and restored the said issue to the file of the Assessing Officer for fresh consideration, it follows that even the issue involved in Ground No 2, which is consequential in nature, should also go back to the Assessing Officer for fresh consideration depending on his decision on the main issue. Expenditure incurred on payment of software licence fees - nature of expenditure - revenue or capital expenditure - HELD THAT:- We find merit in the arguments of the ld. Counsel for the assessee that the expenditure in question incurred by the assessee did not result in any enduring benefit to the assesesee so as to treat the same as capital in nature. If we consider the nature of the software for which licence was acquired by the assessee and the use for which the same were put in the profession of the assessee of Chartered Accountancy, the expenditure in question incurred by the assessee as its share in the licence acquired to use the said software is revenue in nature and the same is allowable as deduction as rightly held by the ld. CIT(Appeals). Disallowance of insurance premium paid by the assessee towards Accountants risk policy - HELD THAT:- It could not be disputed that the payment of policy premium to cover the risk of damages owing to professional negligence was in relation to the business of the assessee and the fact remains that the said payment had a direct nexus with the business of the assessee and had to be recorded as expenses wholly and exclusively for the purpose of the business of the assessee. In Price Water House vide [2018 (9) TMI 1812 - ITAT KOLKATA] held that the premium paid towards Accountants Risk Policy cannot be considered as one falling within the ambit of Explanation 1 to section 37 of the Act - we uphold the impugned order of the CIT(Appeals) deleting the disallowance made by the Assessing Officer on account of insurance paid by the assessee towards Accountant Risk Policy.
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