TMI Blog2014 (1) TMI 1305X X X X Extracts X X X X X X X X Extracts X X X X ..... as revenue, every year – Decided against Revenue. Deduction made u/s 40(a)(ia) of the Act – TDS not deducted – Held that:- Merely because the assessee has reversed the entry of the expenditure claimed in one year in the subsequent year would be no ground for allowability of such expenditure in the year in which deduction is claimed - For allowability of the expenditure, the assessee has to establish that the expenditure was incurred during the year under consideration wholly and exclusively for the purpose of business - the assessee has not established how the expenditure is allowable in the year under consideration except arguing that the entry for the claim of expenditure has been reversed in the subsequent year –the order of the CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treated as capital expenditure by the Revenue. Learned CIT(A) allowed the relief, against which, Revenue was in appeal. However, the ITAT, vide order dated 28th August, 2012 rendered in ITA No.1619 to 1621/Del/2010, upheld the order of the CIT(A) and dismissed the Revenue's appeal. Similar view is followed in AY 2004- 05, 2005-06 2006-07 and thereafter, in AY 2007-08. In view of the above orders of the ITAT in preceding five years, we do not find any justification to interfere with the order of learned CIT(A) in this regard. The same is sustained and ground No.1 of the Revenue's appeal is rejected. 4. Ground No.2 of the Revenue's appeal reads as under:- "The ld.CIT(A) has erred in directing the AO to allow deduction of Rs. 88,87,668/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned CIT(A). He, therefore, submitted that the addition should be sustained in this year. 7. In the rejoinder, it is stated by the learned counsel that if the addition is sustained in this year, then it would amount to double addition because in the subsequent year, by reversing the entry, the assessee has offered the sum of 88,87,668/- as its income. He, therefore, submitted that he has no objection if the addition is sustained in this year with a direction to the Assessing Officer that the income offered by the assessee in the subsequent year by reversal of the above entry should not be assessed in the subsequent year. 8. Learned DR has no objection to the issue of such direction to the Assessing Officer. 9. After considering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penditure. If it is so, he will give the consequential effect i.e., such reversal would not be treated as income of the assessee in that year. With this direction, ground No.2 of the Revenue's appeal is allowed. 10. Ground No.3 of the Revenue's appeal reads as under:- "The ld.CIT(A) erred on facts and in law in deleting the addition amounting to Rs. 10,79,660/- capitalization of licence fee paid to M/s Nuance Communication." 11. We have heard both the parties and perused the material placed before us. Learned CIT(A) has recorded the finding that the assessee made the payment of license fee of Rs. 10,79,660/- to M/s Nuance Communication, a Belgian company, as per the agreement for procuring license for use of its voice software and the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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