2021 (1) TMI 321 - ITAT BANGALORE

Disallowance of deduction of claim u/s 80JJAA - salary paid to new regular workmen - HELD THAT:- As decided in own case [2014 (11) TMI 1202 - ITAT BANGALORE] submissions of the assessee before CIT(A) that the DVO has not considered the units in County – I project and therefore the report of the DVO cannot be said to be final in the matter. In these circumstances, we do not find any merit in the ground No.3 raised by the Revenue. In any event, the physical measurement has to be taken by the AO and the AO is at liberty to take physical measurement in an appropriate manner and therefore there cannot be any grievance to the Revenue. For the reasons given above, we find no merit in the appeal by the Revenue. Remit the issue to the file of Assessing Officer on similar directions. The lower authorities have to take same view on this issue as taken in the A.Y. 2008-09. This ground of appeal is allowed for statistical purposes.

Disallowance of Annual Maintenance Contract and software expenses - Addition u/s 40(a)(i)/ 40(a)(ia) on account of non-deduction of tax at source - AR submitted that the learned CIT(A) ought to have appreciated that that the payments made by the assessee towards purchase of software is not covered within the meaning of ‘royalty’/ ’royalties’ under the applicable DTAA and hence, the Appellant was not under the obligation to withhold taxes - HELD THAT:- We are of the opinion that the assessee cannot foresee the changes in the Act which was made wherein Expln. 5 to Section 9(1)(vi) of the Act was inserted vide Finance Act, 2012 w.e.f. 1.6.2016 since these payments are made prior to this amendment. Being so, following the Tribunal order in the case of Acer India Pvt. Ltd. [2020 (10) TMI 450 - ITAT BANGALORE] we allow the above ground taken by the assessee.

Deduction of education cess and secondary higher education cess - assessee submitted that the assessee out of abundant caution had not claimed the said deduction in the return of income for the year under consideration in the absence of clarity in respect of the said issue - HELD THAT:- As relying on VOLTAS LIMITED [2020 (7) TMI 125 - ITAT MUMBAI] deducation Cess” and the Secondary and Higher Education Cess is not disallowable as a deduction u/s 40(a)(ii) .