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2024 (4) TMI 257 - AT - Income TaxLate payment of employees’ contribution to PF u/s 43B - HELD THAT:- This issue is covered in favour of Department by the Judgment of the Hon’ble Supreme Court in the case of M/s. Checkmate Services (P) Ltd. [2022 (10) TMI 617 - SUPREME COURT] following the same, this ground is dismissed. Disallowance on account of prior period expenses - HELD THAT:- Since the amounts involved in all these issues are very small, the same are dismissed without going into the merits of the case, for which the Ld. Counsel for the assessee has no objection. Thus, ground dismissed. Disallowance of interest as capital expenditure - AO capitalised the interest at the rate of 12% on closing balance of CWIP in the absence of exact computation provided by the assessee and this disallowance is confirmed by the Ld. CIT(A) - HELD THAT:- The Reserves and Surplus as on 31st March, 2013 are Rs. 37.04 Cr as against that of Rs. 39.68 Cr in addition to the share of Rs. 3.22 Cr. It is also observed that the addition to the capital work-in-progress is only Rs. 3.33 Cr, which is much lower than the available free funds in the form of Reserves and Surplus. The AO has worked out the disallowance based on the closing balance of CWIP at the rate of 12%. While doing so, AO has ignored the availability of own funds and wrongly assumed that the addition to CWIP was entirely out of borrowed funds. Therefore, in view of the wrong application of facts by the Ld.AO and judicial precedents on the above subject, we find no merit in the order of Ld.CIT(A) in confirming the addition under section 36(1)(iii) of the Act and we hereby delete the same. In the result, Ground of the appeal is allowed. Addition in view of the Provisions of section 50C on the Gift of Plots - Transfer of property by a Company as a gift - AO concluded how the gift by one company to other company can be genuine, considering the fact that the company is an Artificial Judicial Person and the element of “natural love and affection” cannot be exist and why not to invoke the provisions of section 50C of the Act for the above Gift transaction - HELD THAT:- Section 5 of the Transfer of Property (TP) Act, 1882, defines the term 'transfer of property', as an act by which a living person conveys property, in present or in future, to one or more other living persons, or to himself, or to himself and one or more other living persons.TP Act, considers a company not only as a Person but literally speaking as a 'living person', a person with life. The same expression 'person' is provided in section 5 is transplanted in section 122 of the TP Act, which defines a 'gift' . There is no restriction in law against a company making Gift of its property, to another company. A transfer without consideration when claimed as a gift is always a gift. Further Section 47(iii) of the I.T. Act, specifically provides that any transfer of a capital asset under a Gift is not regarded as a transfer. Therefore the Plots transferred by the assessee company by way of executing Gift Deed in favour of M/s. Ratnakar Estate Developers Pvt. Ltd. is a valid Gift and not liable for capital gain. Consequently invoking the provisions of Section 50C of the I.T. Act, does not arise in the above transaction. Decided against revenue. Depreciation on Computer software - AO disallowed the claim stating that the assessee has only purchased license to use the software and therefore not entitled to claim depreciation at 60% - HELD THAT:- Depreciation on computer software is no more res integra as this issue is settled by the Special Bench of the Tribunal in the case of DCIT vs. Datacraft India Limited, (2010) 133 TTJ 0377 (Mum) (SB) wherein it was held that as per the meaning of expression 'computer' could not be restricted only to CPU of computer by pulling out import and output devices from ambit of 'computer'-All input and output devices, which in fact support in receipt of input and outflow of output were also part of 'computer'- When particular hardware or software was used along with computer and when their functions were integrated with computer, such hardware or software would be termed as 'computer'-Items on which Assessee claimed depreciation at rate of 60% by treating them as 'computer' were being used as input or output device of computers-Any device used along with computer and when their functions were integrated with computer came within ambit of the expression 'computer'- Assessee was entitled to avail depreciation at rate of 60% as was applicable to a 'computer'. Decided in favour of assesee.
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