TMI Blog2018 (1) TMI 511X X X X Extracts X X X X X X X X Extracts X X X X ..... is using MS Office software as operating software in its system, it does not mean that MS Office software is the capital asset in the hands of the assessee-company. All assets / licence for use of software cannot be construed as capital asset merely because it gives an enduring benefit. By using MS Office software in the business of the assessee, the assessee gets enduring benefit in the course of earning of profit. So long as the assessee is a licensee, the ownership of MS Office software remains with Microsoft company. This Tribunal is of the considered opinion that the expenditure cannot be construed to be capital expenditure. See CIT Versus SOUTHERN ROADWAYS LTD.[2007 (6) TMI 193 - MADRAS HIGH COURT] - Assessing Officer is directed to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count. The Assessing Officer has not verified whether the claim made by the assessee was written off in the books. Moreover, the assessee claims that the money was advanced and invested in the sister concern. Whether it is a loss during the course of business or not also needs to be examined. Since these facts are not examined by both the authorities below, this Tribunal is of the considered opinion that the matter needs to be reconsidered. Accordingly, the orders of both the authorities below are set aside and the issue of addition made on account of bad debt is remitted back to the file of the Assessing Officer who shall reconsider the issue afresh on the basis of material available on record. - ITA Nos.1544, 1545 And 1546/Mds/2017 - - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve submitted that the expenditure incurred by the assessee in computer software package has to be treated as revenue expenditure. The Ld. representative has also placed reliance on the judgment of Karnataka High Court in CIT v. IBM India Ltd. (2013) 357 ITR 88 and judgment of Delhi High Court in CIT v. Asahi India Safety Glass Ltd. (2012) 346 ITR 329. The Ld. representative has also placed his reliance on the judgment of Bombay High Court in CIT v. Kotak Securities Ltd. (2012) 346 ITR 349. 4. On the contrary, Shri AR.V. Sreenivasan, the Ld. Departmental Representative, submitted that the assessee purchased MS Office software which gave enduring benefit in the business of the assessee. Therefore, according to the Ld. D.R., the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts of the case. Therefore, the CIT(Appeals) is not justified in distinguishing the judgment of Madras High Court. 6. In view of the above discussion, we are unable to uphold the order of the lower authority. Accordingly, orders of both the authorities are set aside and the Assessing Officer is directed to allow the expenditure incurred by the assessee in acquiring licence of MS Office software as revenue expenditure while computing the taxable income. 7. The next ground of appeal is regarding the diminution in value of investment for assessment year 2012-13. 8. Shri Y. Sridhar, the Ld. representative for the assessee, submitted that the assessee established a subsidiary company, namely, M/s iLink Systems UK. Since the compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the claim of the assessee on the ground that income from UK subsidiary company is not taxable in India. Therefore, the loss in diminution in value cannot be allowed while computing the total income. The fact is that the control and management of subsidiary company in India was not considered by the both the authorities below. Moreover, the Double Taxation Avoidance Agreement between UK and India was also not considered. Therefore, the matter needs to be re-examined by the Assessing Officer. Accordingly, the orders of both the authorities below are set aside and the issue is remitted back to the file of the Assessing Officer. The Assessing Officer shall reconsider the issue afresh after considering the control and management of the UK subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en off in the books of account. According to the Ld. D.R., the CIT(Appeals) further found that the judgment of Apex Court in S.A. Builders Ltd. (supra) was in the context of allowability of interest on the borrowed money and not the allowability of money advanced to its sister concern. Therefore, according to the Ld. D.R., the CIT(Appeals) has rightly confirmed the disallowance made by the Assessing Officer. 14. We have considered the rival submissions on either side and perused the relevant material available on record. The assessee admittedly advanced money to sister concern for its business. It is not in dispute that the money was used by the sister concern for its business. For the purpose of claiming an amount as bad debt, it should ..... X X X X Extracts X X X X X X X X Extracts X X X X
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