TMI Blog2010 (9) TMI 1167X X X X Extracts X X X X X X X X Extracts X X X X ..... paid on leased flat. 3. The Commissioner of Income-tax (Appeals) erred in confirming the disallowance of ₹ 8,53,076/- being the unutilized Modvat credit under section 145A of the Act. 4. The Commissioner of Income-tax (Appeals) erred in confirming the disallowance of the Appellant s claim for commission payment of ₹ 13,45,256/-. 5. The Commissioner of Income-tax (Appeals) erred in confirming the action of the Assessing Officer s in treating the software expenses of ₹ 1,96,350/- as capital in nature. 6. The Commissioner of Income-tax (Appeals) erred in confirming the Assessing Officer s action in considering the miscellaneous income as part of the turnover for the purpose of deduction under section 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have considered the issue. Since the expenditure is merely for renewal of registration of existing trademark, the expenditure is revenue in nature as held by the Hon'ble Supreme Court in the case of CIT vs. Finlay Mills Limited 20 ITR 475 and further by the Hon'ble Bombay High Court in the case of CIT vs. Century Spinning Weaving And Manufacturing Company Ltd. 15 ITR 105. Registration expenses of trademark and its renewal are to be allowed as revenue expenditure. Accordingly the A.O. is directed to allow the amount. 7. Ground No. 2 pertains to the issue of stamp duty on leased flat. The A.O. noted that the assessee failed to furnish details such as location, lease agreement, etc. and since the flat was leased for at least three y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee s claim. Accordingly the ground is allowed. 10. Ground No. 3 pertains to addition on account of unutilised Modvat for ₹ 8,53,076/-. In line with the principles established by the Hon'ble Bombay High Court in the case of Mahalakshmi Glass Works 318 ITR 116 and Hon'ble Delhi High Court in the case of Mahavir Alluminium 297 ITR 77 the issue with reference to addition on unutilised Modvat is restored to the file of the A.O. to examine it afresh and to make adjustments to the opening stock, purchases and closing stock on gross basis under section 145A. For this purpose the issue is restored to the file of the A.O. to reconsider in line with the principles established by the above decisions. The ground is conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to the A.O. for proper examination and after receipt of the report the CIT(A) came to a finding that the assessee company was commissioned in 1959 and has not paid any commission in earlier years and there was no increase in turnover also. Accordingly he was of the opinion that there is no need to pay the commission. It was also further noted that the assessee has no reason for not producing complete details before the AO such as PAN, copies of bank statements, details of parties introduced and products launched, etc. He was of the opinion that even during the remand procedure the assessee failed to furnish the contract and accordingly he confirmed the disallowance. 12. Before us the learned counsel submitted that the entire details w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts placed by the assessee. Further it is assessee s contention that they entered into new business line of providing machinery to sugar industries and justified increase in commission with increase in turnover to the sugar industry. The CIT(A) obviously missed this aspect and noted that the assessee s overall turnover has not increased and since the assessee company was more than 50 years old there is no justification of payment of commission. We are unable to agree with the above findings. There is enough evidence placed by the assessee before the authorities to justify the commission to Mr. A.K. Jain for the services rendered in getting the orders from sugar industry. There is also evidence for payment of commission and TDS thereon. Prim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT 111 ITD 112 (Del) and also of the judgement of the Hon'ble P H High Court in the case of Varinder Agro 22 DTR 127. 16. We have considered the issue. As seen from the nature of expenditure these were amounts paid for obtaining MS Windows 98 and MS Word 2000 software for its office use and not a new software purchased alongwith computer. Since the nature of expenditure is revenue, in line with the principles established by the above two decisions (supra) the software expenditures are to be held revenue in nature. The A.O. is directed to allow the same and withdraw the depreciation granted, if any. Ground is considered allowed. 17. Ground No. 6 pertains to the claim of 80HHC with reference to miscellaneous income of ₹ 65, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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