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TMI Blog2013 (8) TMI 816X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in upholding the additions made by the Learned Assessing Officer (hereinafter referred to as "LAO'') towards non-accrual of interest on debts outstanding for more than 90 days without out appreciating the fact that the debt which had become overdue will not commercially accrue any further income under the concept of prudence laid down by the Central Board of Direct Taxes in its Accounting Standard notified u/s145A. 3. The Learned CIT(A) upheld that the disallowance of software expenses without appreiciating the fact that the expenditure was incurred towards upgradations due to change in features and hence would not have enduring advantage having regard the obsolescence imminent in computer software.'' 3. Brief facts of the case are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee had adopted practice of not accounting for interest on loans outstanding for more than 90 days instead of following past practice of non accounting for loans outstanding for 120 days or more. In AO's view, earlier, when the loans were outstanding for more than 120 days, the assessee would write off the loans in the books of accounts and thereafter, it would stop accounting for interest accrued on such loans. Per AO, in accordance with the changed practice now followed, the loans are written off from the books as bad debts if they are outstanding for payment for more than 120 days, but the assessee had stopped accounting for interest for such income if they are outstanding for more than 90 days. Therefore, he held that till the loan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question. The relevant ground is therefore decided against the assesse. 9. This leaves us with the issue of software expense disallowed/added by the Assessing Officer as well as the CIT(A). The assessee in its profit and loss account had debited an amount of Rs. 17,84,444/- attributed to software development. In support, the assessee pleaded that the expenditure regarding software maintenance, online support and training cost and UPS maintenance etc are 'revenue' in nature. In Assessing Officer's opinion, most of the expenses had been incurred mainly for the purpose of acquisition of new software systems. In the re- assessment order, he returned a specific finding that the expenses has been incurred for installation of new software system ..... X X X X Extracts X X X X X X X X Extracts X X X X
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