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 597 - AT - Income TaxDisallowance u/ s 14A r. w. Rule 8D - need for recording satisfaction - 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 14 A(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 14 A 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 14 A(2). Hence, we decline to interfere with the order of the ld. CIT (A) and the disallowance is directed to be deleted. Disallowance of excess depreciation - depreciation on software @25% against the 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 I- Flex 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 Disallowance of additional claim of deduction on account of Employee Compensation Expenses - HELD THAT:- From the details filed in the case Indiabulls Real Estate Ltd., we find that two schemes have been issued by the assessee namely, IBREL ESOP 2006 and IBREL ESOP 2007. The spread of ESOP 2006 was from FY 2006-07 to 2013-14 whereas ESOP 2008 spread from FY 2008-09 to FY 2009-10 . The assessee has also given the details of date of vesting, number of shares granted, number of shares vested, perk value, taxed in the hands of employees, period of vesting. The perk value of the share ranged from ₹ 635/- to ₹ 134 /- and ₹ 101 /-. The perk value of the share on the date of vesting i. e. 01.11 .2011 was ₹ 6158/-. The discount given in the ESOP 2008 scheme was ₹ 110 .50. Further, no material was placed as to what was the value of the shares as per the market at different years of vesting While laying down the principle that the 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. - Revenue appeal dismissed.
|