Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2020 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (5) TMI 84 - AT - Income TaxDisallowance u/s 14A - HELD THAT:- From the reading of the judgment of the Hon’ble Apex Court in the case of Maxopp Investment Ltd. Vs CIT [2018 (3) TMI 805 - SUPREME COURT] we find that having regard to the language of Section 14A(2) of the Act, read with Rule 8D of the Rules, it clear that before applying the theory of apportionment, the AO needs to record satisfaction that having regard to the accounts of the assessee suo moto disallowance under Section 14A was not correct. It will be in those cases where the assessee in his return has himself apportioned but the AO was not accepting the said apportionment, in that eventuality, the Assessing Officer will have to record its satisfaction to this effect. In the instant case, we find that no such satisfaction has been recorded by the A.O to come to the conclusion to invoke the provisions of Section 14A(2). Hence, we decline to interfere with the order of the ld. CIT (A) and the disallowance is directed to be deleted. Claim of depreciation on software - @25% OR 60% depreciation claimed by the assessee - CIT (A) deleted the addition on the grounds that the AO has mislead himself treating the software as intangible asset - HELD THAT:- we find that the nature of the software acquired were licenses, which do not confer any enduring right and could be used for the duration as acquired for by the licensor. The taxpayer’s objective was to use computer software to maximize its performance and streamline efficiency. The Hon’ble Bombay High Court in the case of M/s IFlex Solutions Ltd. . [2014 (3) TMI 1162 - BOMBAY HIGH COURT] held that there is no reason to differentiate the computer and the software as the latter is an integral part of the former. The software cannot be seen in isolation delinked from the computers. The issue of depreciation @60% on the software is now a settled issue beyond any perplexity. Employee Compensation Expenses - allowable expenditure u/s 37(1) - HELD THAT:- Discount offered on the shares under the ESOP of scheme is allowable deduction u/s 37(1) of the Act, we hereby remand the matter to the file of the AO for the limited purpose of arithmetic calculation of apportioning the year wise discount over the period of vesting taking into consideration, the options granted to the employees, determination of the perk value, FBT levied and allow the same as per the provisions of the Income Tax Act, 1961.
|