TMI Blog2013 (11) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... d out on the basis of adjusted book profit under Section 115JA and not on the basis of the profits computed under regular provisions of law applicable to computation of profits and gains of business - Decided in favor of assesseee. - ITA No.6822,6963/M/2007 - - - Dated:- 12-12-2012 - B R Mittal and Rajendra, JJ. For the Appellant : Shri A C Tejpal (DR) For the Respondents : Shri Sunil M Lala Sheetal Jain ORDER:- Per: Rajendra: Challenging the order of the CIT(A)-VII, Mumbai dt. 14-08-2007, the Assessing Officer (AO) as well as the assessee filed these appeals on the following Grounds: Grounds of Appeal - ITA No. 6822/M/2007 AY. 2004-05 On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in allowing the Software Consumable Expenses of Rs.4,32,48,000/- relying on the CIT(A) s decision in the assessee s own case for the A.Y 2001-02 to 2003-04 with appreciating the fact that the CIT(A) s decision in the assessee s case for AYs 2001-02 to 2003-04 have not been accepted and the Revenue is in appeal for the Hon ble ITAT; 2.On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its under section 115JB of the Income tax Act. 2.The learned Commissioner (Appeals) erred in holding that the deduction under section 80HHE shall be computed on the basis of profits computed under the head Profits and gains of business or profession and not on the basis of book profits as claimed by the appellant. 3.The learned Commissioner (Appeals) erred in not considering the decision of Mumbai Income Tax Appellate Tribunal Special Bench in the case of Syncome Formulations (I) Limited 13 SOT 414 relied upon by the appellant. Carry forward of losses 4.The learned Commissioner (Appeals) erred in not specifically directing the Assessing Officer to quantify and specifically allow the unabsorbed depreciation and unabsorbed business losses of earlier years to be carried forward for set off in the subsequent assessment years. Relief under section 90 5.The learned Commissioner (Appeals) erred in not specifically allowing relief under section 90 of Rs. 1,69,232/- as claimed by the appellant. Issue of refund order 6.The learned Commissioner (Appeals) erred in not directing the Assessing Officer to grant refund of Rs. 86,92,617/- determined in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and perused the material available on file. It is a fact that in the earlier years, Tribunal has set aside the matter to the file of the AO. After perusing the order of the Amway India delivered by the Hon ble High Court of Delhi (supra), we are of the opinion that expenditure incurred by the assessee was revenue in nature and it was incurred for application software and not for system software. Respectfully following the order relied upon by the AR, we decide Ground No.1 in favour of the assessee. 5. Ground No.2 is about Software Expenses of Rs. 10.55 Crores and Hardware Expenses of Rs. 4.83 Crores. During the assessment proceedings, AO found that assessee had claimed Rs. 15.38 Crores (10.55 + 4.83) as Software Consumable Expenses/cost of Hardware, AO held that the amount in question was capital expenditure and hence was not allowable as revenue expenditure. Against the decision made by the AO, assessee preferred an appeal before the FAA. After considering the submission of the assessee-company, FAA held that the appellant had purchased Software/Hardware amounting to Rs. 15.38 Crores as part of its trading operations, that these purchases did not form part of asset of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeal have been filed by the assessee. During the hearing before us, AR submitted that assessee was not interested in pressing Ground Nos. 4 to 6. As the three grounds are not pressed, same stand Dismissed. 10. Ground Nos. 1 to 3 are about deduction u/s. 80HHE for the purpose of Section 115JB. During the course of assessment proceedings, AO found that appellant had computed book profit of Rs. 47.67 Crores, that while computing the profit it had claimed adjustment as per explanation 5 in respect of deduction u/s. 80HHC at Rs. 14.94 Crores, that as per the provisions of explanation or to the Section 80HHE profit of business would be applicable when the deduction was to be claimed for normal total income computed under the normal provisions of the Act, that when book profits u/s. 115JB were to be computed after allowing the deduction of export profits computation had to be based on the profits as per the provisions of Part-II and Part-III of the Schedule VI of the Companies Act. Finally, he dismissed the appeal filed by the assessee. 11. Before us, AR submitted that issue was decided in favour of the assessee by various judgments, for allowing 80HHE deduction was to be calculated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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