TMI Blog2012 (9) TMI 469X X X X Extracts X X X X X X X X Extracts X X X X ..... of court fees - Held that:- As the assessee had not obtained benefit of any enduring nature by way of this expenditure. These expenditures which are incurred in the ordinary course of business have to be allowed to the assessee and the same cannot be disallowed by treating the same as capital in nature. Decided in favour of assessee. Disallowance of depreciation u/s 32 – Rate of depreciation on computer accessories and peripherals - Held that:- Following the decision of Delhi High court in case of BSES Rajdhani Powers Ltd. (2010 (8) TMI 58), that computer accessories and peripherals such as, printers, scanners and server etc. form an integral part of the computer system as they cannot be used without the computer. Hence, same are the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of unrealized profit on forward exchange contract. 3.1 In this case the AO was of the opinion that the assessee had unrealized profit on forwarded exchange contract and was accordingly mentioned in the audit report. The assessee, was confronted on the issue vide note sheet entry dated 12.11.2008 to which a reply was submitted on 24.11.2009. In the reply, it was mentioned that in the A.Y. 2004-05, the assessee had taken some foreign currency loan. This loan was to be repaid, in foreign currency, after a certain period. To avoid any loss from any fluctuation of rate, the assessee entered into a forward contracts with the authorized dealer. Thus, the assessee was now bound to repay the loan at the prefixed rate on the date of repayment and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner of Income Tax (A) observed that it is not in dispute that the sum of Rs. 33,38,429/- had been added to the income of the assessee, by the Assessing Officer, as it was following the mercantile system of accounting. Ld. Commissioner of Income Tax (A) noted that assessee has claimed that the said income has been reflected in the account filed with the P L account. In order to ascertain this fact, attention was drawn to Schedule I enclosed to the Audited Report. From that Ld. Commissioner of Income Tax (A) observed that under loans and advances , there is an entry which indicate unrealized profit on forward exchange contracts and financial instruments to the tune of Rs. 34,99,274/-. Ld. Commissioner of Income Tax (A) further observed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee in this regard. Accordingly, we uphold the order of the Ld. Commissioner of Income Tax (A) and decide the issue in favour of the assessee. 8. Apropos issue of deletion of addition of Rs. 14,00,000/- on account of capitalization of legal and professional charges. 8.1 On this issue Assessing Officer noted that assessee has booked the expenditure to the tune of Rs. 14,00,000/-. In this regard, assessee was asked to submit the details. The expenditure was said to be towards consolidated fees for the reading of papers, for settling the draft for the conference Rs. 10,00,000/-; die modification CGS Rs. 3,00,000/- and court fees Rs. 1,00,000/-. The Assessing Officer opined that assessee had not filed any satisfactory reply justifyin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, there is no way it can be taken as capital in nature. In this regard, Ld. Commissioner of Income Tax (A) referred to the Hon ble Jurisdictional High Court decision in the case of C.I.T. vs. JK Synthetics Ltd. (2009) 222 CTR (Del) 339. Considering the above, Ld. Commissioner of Income Tax (A) held that the expenditure of Rs. 14,00,000/- has to be taken as revenue in nature. 10. Against the above order the Revenue is in appeal before us. 11. We have heard the rival contentions in light of the material produced and precedent relied upon. It was submitted by the ld. Counsel of the assessee that the expenses were incurred towards fees paid to the advocates in respect of Special Leave Petition filed before the Supreme court of India, die m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Ld. Commissioner of Income Tax (A) and hence, we uphold the same. 12. Apropos issue of deleting the addition on account of disallowance of extra depreciation on computer peripherals / accessories. 13. On this issue the assessee had claimed 60% as rate of depreciation on computers. The assessee was confronted that why the rate should not be reduced to 15%. Assessee s submission in this regard was not accepted by the Assessing Officer. Assessing Officer decided to allow depreciation of only 15%. Accordingly, he made the addition of Rs. 1,96,020/-. 14. Before the Ld. Commissioner of Income Tax (A), it was submitted that the I.T. Rules provide for 60% depreciation on computers. It was claimed that in fact the computer was an integral ..... X X X X Extracts X X X X X X X X Extracts X X X X
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