TMI Blog2015 (2) TMI 1365X X X X Extracts X X X X X X X X Extracts X X X X ..... B) - HELD THAT:- Tribunal has held that cut-off date mentioned in the certificate issued by the DSIR would be of no relevance. Once a certificate by DSIR is issued and it is proved that the assessee is indulging in R D activity and had incurred the expenditure thereupon, then the assessee is entitled to deduction u/s.35(2AB). The Ld. Counsel has further invited our attention to the another order of the ITAT relevant to assessment year 2003-04 where in the Tribunal while adjudicating the identical issue has observed that the assessee since then has got formal approval from DSIR in form 3CM, in respect of Vapi unit, has been received on 5th August 2011 and hence the assessee has been entitled for weighted deduction under section 35(2AB) for said unit. It has also been directed that since certificate has been received after passing of orders of the CIT(A), therefore, the matter has been remanded to the AO for the limited purpose of verification of the certificate. As regards Thane unit, since no such order of approval in form no. 3CM was available with the assessee, therefore, disallowance of the weighted deduction under section 35(2AB) with respect to Thane unit has been upheld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court has held that it is not necessary for the assessee to establish that the debt in fact has become irrecoverable. It is enough, if the bad debt is written off as irrecoverable in the accounts of the assessee. We are also in agreement with the finding of the CIT(A) that it is the assessee who as a prudent business man has to decide as to whether there are any chances of the recovery of debts or the same has actually become bad. In view of this, we do not find any infirmity in the order of CIT(A) on this issue. This appeal of the Revenue is accordingly dismissed. Treatment of Computer software expenses as capital in nature - HELD THAT:- The software purchased vide/Bill dated 7.9.06 was valid from 7th Sept. 06 to 6th Oct. 06, whereas, the software purchased vide invoice dated 31st July 2006 was for one year auto updates. The Ld. Counsel has further invited our attention to other bills to show that the relevant software expenses, in fact, were for the annual or monthly support services and thus were periodical expenditure. It was not for long term having enduring benefit. Even otherwise, it is commonly known that now a days, the software version has short duration value, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer (hereinafter referred to as the AO) in restricting the deduction u/s.80HHC of the I.T. Act by invoking provisions of section 80IA(9) of the Act, while giving effect to the order of the ITAT. It has been contended that the Ld. AO has exceeded his jurisdiction while doing so. The Ld. Counsel for the assessee has brought our attention to the fact that earlier the matter on the issue had travelled to this Tribunal and the Tribunal while deciding the issue under consideration had accepted the contention of the assessee regarding netting of the expenditure incurred in relation to the income of the assessee while computing deduction u/s.80HHC. The Tribunal vide order dated 25.01.2008 passed in ITA No.6036/M/04 has restored this issue to the file of the AO to exclude only net other income after examining the nexus between the expenditure incurred in the earning of other incomes and giving an adequate opportunity of hearing to the assessee to substantiate its claim by submitting necessary evidences. The Ld. AO, while giving effect to the order of the Tribunal, observed that the assessee could not furnish the details of expenditure incurred in relation with earning such other/rental inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchased from Pravin Metal Corporation ₹ 57,666/- 2.1 On the facts and in the circumstances of the case and in law, the learned CITA) erred in disallowing the depreciation of ₹ 57,666/- on the assets purchased from M/s Pravin Metal Corporation. 3. Re: Disallowance u/s. 14A of ₹ 1,09,69,810/- 3.1 On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in upholding disallowance u/s 14A read with rule 8D amounting to ₹ 1,09,69,810/-. 3.2 The learned CITA) ought to have considered that the Appellant had sufficient own / interest free funds and an investment made ought to have been considered as made out of own interest free funds. 3.3 Without prejudice to the above, the disallowance u/s. 14A ought to be substantially reduced. 4. Re: Disallowance of depreciation claimed under Rule 5 (2) ₹ 2,60,79,911/-: 4.1 The Assessing Officer grossly erred in disallowing depreciation benefit under Rule 5(2) of Income Tax Rules to the tune of ₹ 2,60,79,911/- on the technical ground that the Appellant was not able to produce the certificate from Department of Scientific and Industrial Research (DSIR). 5. Re: Le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 06.07.2001 to 31.03.2012 for the Vapi unit. In view of above we accordingly restore the matter to the AO for the limited purpose of verification of the above stated certificated dated 05.08.2011 and if verified to be correct, the AO to allow the claim of the assessee accordingly. Since no such certificate is available for the Thane unit hence, the claim for Thane unit on this issue is not allowable. Ground No.2: Depreciation on assets purchased from Pravin Metal Corporation :- 7. At the outset, Ld. Counsel for the assessee has stated at bar that for the earlier assessment years i.e. assessment years 1999-2000, 2000-01 in ITA No.6036/M/04 and othr., order dated 25.01.2008 and further for assessment years 2001-02 and 2002-03 in ITA No.8387/M/04 and another order dated 30.03.2012 and further for the assessment year 2003-04 in ITA No.370/M/09 order dated 12.9.2012 the matter has been restored to the file of the AO to decide it a fresh. The operating part of the order dated 12.09.2012, for the sake of convenience is reproduced as under; 13. Ground no.3, relates to disallowance of depreciation ₹ 1,36,889, on the asset purchased from Pravin Metal Corp. 14. Before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esh in the light of the directions given in the said order of the Tribunal and after providing due and effective opportunity of being heard to the assessee. 8. In view of the above directions of the Tribunal given in earlier years, the issue for this year is accordingly restored to the file of the AO to decide it in the light of the directions as reproduced above and after providing due opportunity of being heard to the assessee. Ground No.3- Disallowance u/s.14A of the Act:- 9. The Ld. Counsel has brought our attention of the fact that in the earlier assessment years i.e. A.Y.1999-2000, 2001-02 2002-03 and A.Y. 2005-06 disallowances have been restricted by the Tribunal to 2% of dividend income received by the assessee. The relevant year before us being 2005-06, rule 8D of the income Tax Rules is not applicable for this year as has been held by the Hon ble Bombay High Court in the case of Godrej Boyce Mfg. Co. Ltd. vs. DCIT (2010) 328 ITR 81 (Bom) that the same is applicable from assessment year 2008-09 on words. In view of the consistent finding of the Tribunal for earlier assessment years, restricting disallowance u/s.14A to the extent of 2% of dividend incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for Assessment Year 2007-08 (Assessee s Appeal):- Ground No.1- Treatment of Computer software expenses as capital in nature:- 13. The AO noted that the assessee debited computer software expenses of ₹ 10,99,800/- to its P L account and claimed it as Revenue expenditure. The AO, however, treated the same as capital expenditure and allowed the depreciation at the rate of 60% thereupon. The Ld. CIT(A) also held that the software purchased by the assessee was for use on long term basis, giving enduring benefit to the assessee. He, therefore, upheld the finding of the AO in this respect. The assessee has thus come in appeal before us on this issue. 14 We have heard the rival contentions. The Ld. AR of the assessee has brought our attention to the relevant invoice dated 07.09.06 wherein description is mentioned as : SAP Post implementation support charges from 7th Sept. 06 to 6th Oct. 06 (A) Amount in 75000.00 (INR) + Service Tax (12.24%)(B)-9180.00, Grand Total (A+B)= 84180(INR). He has further invited our attention to the invoice dated 3rd July 2006 : Ecan Corporate Edition Sever Client Version for 1 year Auto updates ₹ 8000.00 + Vat @4%-320.00, Total A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e received by the assessee during the course of appellate proceedings and were submitted to the CIT(A). At the same time, assessee filed an application u/s.154 of the Act with the AO to allow the said deprecation. However, the same has not been disposed off by the AO. In view of our finding given above, this ground is decided accordingly. If the assessee has moved any application u/s.154 on this issue, the AO will dispose off the said application also while giving effect to our order on this issue. Ground No.4- Disallowance u/s.14A of the Act:- 18. This ground is identical to ground No.3 taken by the assessee in ITA No.7427/M/10 for assessment year 2005-06. In view of our findings given above, the disallowance on this issue is restricted to 2% of the Dividend income accordingly. Ground No.5- Depreciation on assets purchased from Pravin Metal Corporation:- 19. This ground is identical to ground no.2 of the assessee s appeal in ITA No.7427/M/10 for assessment year 2005-06. In view of our findings given above, this issue is accordingly restored to the file of the AO. ITA No.01/M/2012 for assessment year 2007-08 (Revenue s Appeal):- Ground No.1- disal ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
