TMI Blog2018 (10) TMI 989X X X X Extracts X X X X X X X X Extracts X X X X ..... copyright was granted to the assessee company. The assessee company had not acquired the copyright. In such circumstances, licence fee paid was a revenue expenditure. Addition u/s 40(a)(ia) - second proviso to Section 40(a)(ia) of the Act applicability - Held that:- The Tribunal has dealt with the factual aspect of the matter and it has been specifically recorded that the assessee has been able to prove that the recipients of the interest income have included the income in their return and paid taxes thereon. The said findings have not been shown to be erroneous in any manner. The said expenses were allowable in view of the provisions of Section 40(a)(ia) r.w.s. 201(1) of the Act. In such circumstances, since the Assessing Officer has h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 232 ITR 316(SC) which was delivered prior to amendments in Section 32(1)(ii) of the Income Tax Act, 1961 and in Rule 5(1) of the Income Tax Rules, 1962, w.e.f. A.Y. 1999-2000, whereby intangible assets, inter-alia, copyrights have been included in the appendix 1 prescribing intangible assets as a separate block of assets on which depreciation is applicable @ 25%. 3)Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT was right in treating the copyright expense with enduring benefits as revenue expenditure? 4)Whether on the facts and in the circumstances, ITAT was right in allowing the appeal of the assessee by holding that the insertion of second proviso to Section 40(a)(ia) is declaratory and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cs (Non Banking Financial Company). The Tribunal vide order dated 28.02.2017 dismissed the appeal of the revenue. It is pertinent to note here that the Tribunal while deciding relied upon its decision in the appeal of the assessee filed for assessment year 2008-09. In the decision of the appeal for assessment year 2008-09, Tribunal further relied upon its decision rendered for assessment year 2009-10. Aggrieved of the dismissal of the appeal by the Tribunal, the present appeal has been preferred. 7. The questions No.1 to 3 are answered in favour of the assessee. Identical questions arose in the appeal filed by the revenue in the case of the assessee itself for the assessment year 2009-10 i.e. Principal Commissioner of Income Tax-2, Cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d deducted and paid tax on such sum on the date of furnishing of return of income by the resident payee referred to in the said proviso. 11. At this stage, it would be appropriate to quote first proviso to Section 201 as inserted by Finance Act, 2012 w.e.f. 01.07.2012:- Provided that any person, including the principal officer of a company, who fails to deduct the whole or any part of the tax in accordance with the provisions of this Chapter on the sum paid to a resident or on the sum credited to the account of a resident shall not be deemed to be an assessee in default in respect of such tax if such resident- ( i) has furnished his return of income under Section 139; ( ii) has taken into account such sum for computi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ark Township Private Limited, (2015) 377 ITR 635 (Delhi) held that the second proviso to Section 40(a)(ia) and first proviso to Section 201(1) of the Act though inserted by Finance Act, 2012, would be applicable retrospectively w.e.f. 01.04.2005. The relevant portion of the decision is quoted below:- We are in agreement with the view of the Delhi High Court in Ansal Land Mark Township Pvt. Limited s case (supra) approving the reasoning of the Agra Bench of the ITAT whereby holding the rationale behind the insertion of the second Proviso to Section 40(a)(ia) of the Act and that it is merely declaratory and curative and thus, applicable retrospectively with effect from Ist April, 2005. 15. This Court has held that second prov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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