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TMI Blog2016 (11) TMI 1029X X X X Extracts X X X X X X X X Extracts X X X X ..... common order. Basically, the assessee has raised only two grounds which are as under: (1) Disallowance u/s. 14A r.w.Rule 8D of the Act. (2) Disallowance of Software Usage Charges. ITA No. 1778/Mum/2013- AY-2009-10 2. Brief facts of the case are that the assessee filed return of income for relevant Assessment Year (AY) on 22.09.2009 declaring total income of Rs. NIL. The return of income came under scrutiny. The assessment under u/s 143( 3) was framed vide order dated 13.02.2011. While framing the assessment, the AO made the disallowance u/s. 14A of Rs. 19,43,486/-. The assessee claimed Software uses Charges of Rs. 14,56,292/-. The AO hold that the payments were made on account of software development which is capital in nature. Thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to earning of exempt income. The Ld. AR of the assessee further relied upon the decision of Rajshree Production Pvt. Ltd. (TS-570 ITAT 2013, Mum), Kalyan Steel Ltd. vs. ACIT (ITA No. 1733/PN/2011), CIT vs. Gujarat State Fertilizers & Chemicals Ltd. (2013) 85 CCH 226 (GUJHC), Shopper Stop Ltd. vs. ACIT, ACIT vs. Midcaps Ltd. decision of Indore Tribunal. On the other hand, Ld. DR for the Revenue strongly supported the order of authorities below. 4. We have considered the rival contention of the parties and perused the material available on record. The AO while making the assessment observed that the assessee derived dividend income of Rs. 2,30,94,862/- which is claimed as exempt income, the assessee has paid interest of loan of Rs. 3,92, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness. The assessee's case is covered by sub-sections (2) & (3) of section 14A of the Act as the assessee is claiming that no expenditure has been incurred by it in relation to the exempt income. We have seen that as per the balance sheet , investment reflected in as on 31.03.2010 was of Rs. 29,98,21,124/-. Further, as per the balance sheet for AY 2009-10, the total investment of the assessee as on 31.03.2010 was Rs. 29,98,21,124/- and the assessee was having reserve and surplus amount of Rs. 1,48,60,50,942/-. The assessee has secured loan of Rs. 3,70,00,000/-. The assessee-company has own sufficient fund. We have noticed that before making disallowance the AO not made any enquiry about the nature of investment as if it was strategic or the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ile making assessment, the AO observed that assessee-company claimed Software Uses Charges of Rs. 14,56,292/- which was paid on account of Software Uses Charges. The AO concluded it as Capital in nature and allowed only 60% depreciation, thus Rs. 5,82,517/- was disallowed. The CIT(A) while considering this ground concluded that the AO has given consequential effect on the depreciation in the specific year in accordance with provision of the Act and on the written down value of the previous year mentioned software capitalized by him on the basis of depreciation allowed @ 60% in AY 2006-07. For ascertaining as to whether the expenditure of computer software gives enduring benefit to assessee, the duration of time for which assessee required ..... X X X X Extracts X X X X X X X X Extracts X X X X
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