TMI Blog2010 (2) TMI 869X X X X Extracts X X X X X X X X Extracts X X X X ..... scribed under respective statute but before the due date of furnishing the return of income under section 139(1) of the Act. Since the payment has been made before the due date of filing of the return under section 139(1) of the Act, assessee will been entitled for deduction u/s 43B of the Act in respect of employee's contribution, CIT (A) was justified in deleting the addition Disallowance of claim on account of depreciation - depreciation on tube-well installed at the factory site - assessee not claimed depreciation on farm tube-well - assessee owns another tube-well in the factory building for the purpose of factory use. The water supplied by the tube-well is used in the factory - Held that:- use of tube-well in the factory is not for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- on the tube well installed at the factory site at Faridabad." 3. The first issue for consideration relates to treating the expenditure on software acquisition as capital in nature. The facts of the case stated in brief are that the assessee incurred expenditure of Rs.14,50,000/- on purchase of software and claimed the same as revenue expenditure. During the course of assessment proceedings it was submitted by the assessee that no capital asset came into existence. However, this contention of the assessee was rejected and the amount of Rs.14,50,000/- was treated as capital expenditure. 4. On appeal the ld. CIT (Appeals) noted that there was no evidence of incurring similar expenditure in earlier years. The assessee will be derivin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s capital in nature and the functional test as discussed above also needs to be satisfied. (iii) Once the tests of ownership and enduring benefit are satisfied, the question whether expenditure incurred on computer software is capital or revenue has to be seen from the point of view of its utility to a business and how important an economic or functional role it plays in his business. In other words, the functional test becomes more important and relevant because of the peculiar nature of the computer software and its possible use in different areas of business touching either capital or revenue field or its utility to a business which may touch either capital or revenue field. 60. Having laid down the criteria for determining the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee. 6. The next issue for consideration relates to disallowing the deduction on account of employees contribution to provident fund amounting to Rs.2,40,595/-. The facts of the case stated in brief are that as per the tax audit report the amount of Rs.2,40,595/- for the month of September, 2005 was paid on 31st October, 2005. Since the payment was made beyond the due date the assessing officer treated the employees contribution as income under section 2(24)(x) read with section 36(1)(va) of the Act. On appeal the ld. CIT (Appeals) upheld the disallowance. 7. We have heard both the parties and gone through the material available on record. We find that this issue is now covered by the decision of Hon'ble Delhi High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered opinion, the ld. CIT (A) was justified in deleting the addition of Rs.2,40,595/- on account of employee's contribution for the month of September, 2005 paid on 31st October, 2005. to Provident Fund. 8. The last issue for consideration relates to disallowing the claim on account of depreciation of Rs.15,489/- on tube-well installed at the factory site at Faridabad. The assessing officer disallowed the depreciation on the ground that tube-well was used for agricultural purposes and hence depreciation was not allowable. The ld. CIT (Appeals) upheld the stand taken by the assessing officer. 9. Before us the ld. AR of the assessee submitted that the assessee had separate tube-well for agricultural farm on which no depreciation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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