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TMI Blog2015 (10) TMI 994X X X X Extracts X X X X X X X X Extracts X X X X ..... see is that the Commissioner of Income-tax (Appeals) erred in confirming the action of the Assessing Officer in treating application computer software of Rs. 23,41,614 as capital expenditure. The Assessing Officer while completing the assessment noticed that the assessee has purchased various softwares worth Rs. 23,41,614. The Assessing Officer was of the view that entire expenses were for the purchase of softwares Oracle, Autocad, PRO E, NI-DAQ, MX software, etc., therefore he was of the view that these softwares have enduring nature and provided benefits for years together and therefore treated as capital expenditure. On appeal, the Commissioner of Income-tax (Appeals) sustained the action of the Assessing Officer in treating cost of soft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vement of technology and no machinery was brought into existence. Such expenses incurred by the assessee for enhancement of efficiency, in our considered opinion, is nothing but an upgradation of computers for achieving the desired result and, therefore, the same has to be treated as revenue expenditure." 6. As could be seen from the above observation of the High Court that the expenditure incurred on upgradation of software is revenue expenditure. Respectfully following the said decision, we allow the ground of appeal of the assessee on this issue. 7. The next issue in the appeal of the assessee is that the Commissioner of Income-tax (Appeals) erred in confirming the action of the Assessing Officer in disallowing loss of transaction of f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion should be added to the cost of asset under section 43A of the Act which aspect was not considered by the authorities. Counsel referring to page 2 of the assessment order submits that the assessee has in fact filed letter dated November 29, 2011 stating that loan was acquired for the purchase of capital asset along with list of assets purchased. Referring to page 4 of the assessment order, counsel submits that the Assessing Officer had in fact observed that if borrowing is for capital asset, exchange loss actually suffered would require to be capitalised in the context of the present law after substitution of section 43A with effect from the assessment year 2003-04. Counsel for the assessee referring to page 5 of the assessment order su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was repaid or outstanding or partly repaid or outstanding, as the submission of the assessee was that loan was repaid and the losses incurred by the assessee on foreign exchange fluctuation of FCNR, the loan is not a contingent liability. Therefore, in the light of the submissions of the assessee and also since the lower authorities have not examined this issue, we remit this issue back to the Assessing Officer with a direction to apply provisions of section 43A of Act and decide this issue in accordance with law after providing adequate opportunity to the assessee. 12. The only ground in the appeal of the Revenue is that the Commissioner of Income-tax (Appeals) erred in directing the Assessing Officer to exclude exchange fluctuation on sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal observing as under : "7.2 I have considered the submission of the appellant and have also gone through the assessment order. I find the issue to be squarely covered by the decision of the Special Bench of the juris dictional Tribunal in the case of ITO v. Sak Soft Ltd. [2009] 313 ITR (AT) 353 (Chennai) [SB]. Respectfully following the decision of the jurisdictional Income-tax Appellate Tribunal, Special Bench in the case of Sak Soft Ltd. I direct the Assessing Officer to exclude the foreign exchange fluctuation income both from export turnover and from total turnover for the purpose of computing under section 10AA. The grounds of appeal as regard ..... X X X X Extracts X X X X X X X X Extracts X X X X
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