TMI Blog2022 (7) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... e profit apparatus or any capital asset. In such case, the expenses incurred are to be allowed as revenue and assessee has only amortized these expenses in 5 years and the same are allowable as revenue expenditure u/s.37 of the Act. We find no infirmity in the order of CIT(A) and hence, the appeal of Revenue is dismissed. - ITA No. 59 & 60/CHNY/2011 - - - Dated:- 29-6-2022 - SHRI MAHAVIR SINGH , VICE PRESIDENTAND SHRI MANOJ KUMAR AGGARWAL , ACCOUNTANT MEMBER Appellant by : Shri AR.V. Sreenivasan , Addl. CIT Respondent by : None ORDER PER MAHAVIR SINGH , VP : These two appeals of Revenue are arising out of order of the Commissioner of Income-tax (Appeals)-3, Chennai in ITA No. 378/08-09/A.III 239/09-10/A.III b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vered in favour of the assessee by the decision of the Special Bench dated 2.11.2010 in assessee's own case. In this regard, we reproduce herein below relevant Para Nos.20 21 of the above order: 20. There is no dispute about the fact that the assessee is a company engaged in business of development of software both by way of on site development and off shore development and also that it has branch in USA for which separate accounts were maintained. There is also no dispute about the fact that there is approval of the authorized dealer namely Central Bank of India, Chennai for opening the overseas branch at New Jersy, USA. 21. Now we are called upon to adjudicate whether the Assessing Officer and the learned CIT (A) were r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and export turnover as defined in clause (iii) above would go to show that export turnover of computer software means consideration received in respect of export of computer software but does not include freight, telecommunication charges or insurance to the delivery of computer software outside India or expenses incurred in foreign exchange in providing technical services outside India. 7. In view of the above, we restore this issue to the file of the Assessing Officer for deciding afresh following the Special Bench decision (supra) and allow this ground for statistical purposes only, in both these years. 8. In the result, both the appeals are partly allowed for statistical purposes. 8. Since apparently the issue i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Brief facts are that the assessee claimed a sum of Rs.3,08,08,785/- on account of amortization of business acquisition expenses. The AO required the assessee to explain and assessee explained that during the year 2002-03, the branch office of USA has acquired the clientele and human resources of three USA companies namely Silver Spring Technologies Inc., Schumacher Consulting Group and Schmidt Systems Inc., for a total consideration of Rs.849.19 lakhs. It was explained by assessee before AO that the assessee company did not take over the assets and liabilities of the erstwhile firm and it has not acquired any business of those companies but only acquired employees as well as contracts so that they could carry out their business and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profit and loss account of the assessee company was prepared including the income and expenditure of the US branch operation and for income-tax purpose, the global business income including the US branch profit was taxed. Double Taxation Benefit in respect of the US branch profits was only allowed against the total tax payable by the assessee on the global income. The ld. AR submitted that the overseas branch in USA acquired the clientele and human resources of 3 companies in 2002-03. The cost incurred for such take over was written off over a period of 5 years. It was contended that no business was acquired but only the employees along with certain Contracts were taken over. The ld. AR has relied on the decision of the CIT(A)-III in its ow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the addition made by the AO and the appellant succeeds on this ground. 5.1 I have considered the facts of the case and the submissions of the ld.AR. I find that the ld.CIT(A) in appellant s own case for assessment years 2004-05 and 2005-06 has decided the issue in favour of the appellant in order supra. The facts being the same, I find no reason to deviate from the findings given therein. Accordingly, this ground of appeal is allowed. Aggrieved, Revenue is in appeal before us. 5. Now, before us, the ld. Senior DR could not controvert the findings given by CIT(A) that the assessee has not acquired any capital asset where only the clientele and business contract of those parties were acquired by the assessee for software deve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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