Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (3) TMI 1132 - ITAT DELHIDisallowance u/s. 40(a)(i) on payment to the licensor - non tds - AO made the disallowance treating the nature of the amount to be that of royalty - Held that:- Keeping in view of the decision of the Hon’ble Jurisdictional High Court passed in the case of CIT vs. Dynamic Vertical Sofware India (P) Ltd [2011 (2) TMI 77 - DELHI HIGH COURT] wherein held that the assessee has been purchasing the software from Microsoft and sold it further in Indian market - By no stretch of imagination it would be termed as "royalty" - No TDS - Decided in favour of assessee. Disallowance u/s. 40(a)(ai) on payment to Catche License Procurement & Software update - Held that:- The amount was paid to M/s Intersystem India Pvt. Ltd., Gurgaon relating to payment of Catche Licenses Procurement. This has also been disallowed by the AO invoking the provision of section 40(a)(ia) for non deduction of TDS, treating the nature of payment as royalty. In view of the submissions made under Ground No. 2, as aforesaid, the disallowance is not called for - Decided in favour of assessee. Disallowance on account of expenditure made on Tour to Maldives - Held that:- The total expenses incurred on foreign travel to Maldives were ₹ 4,43,893 out of which an amount of ₹ 2,96,861 only has been disallowed which shows that the AO himself does not fully think the expenses not for business purposes. We also find that similar addition was made in AY 2007-08, which was deleted by CIT(A), the department did not go in further appeal. In view of above detailed discussions, we are of the considered view that such adhoc disallowance cannot be upheld.- Decided in favour of assessee. Disallowance on account of expenditure made on client hardware - Held that:- The facts are that the agreement was an going agreement and software are generally implemented on make shift servers and once it is tested and completed in all respects, it is moved to the New Server. Copies of emails from Mr. Rajiv Saxena, Sir Ganga Ram Hospital are placed which shows that the assessee has settled the claim of the client on 50% i.e. for ₹ 4,38,980. We find considerable force in the finding of the Ld. CIT(A) that the assessee has also filed a copy of the debit note dated 20.4.2007 raised by Sir Ganga Ram Hospital. In view of the facts of the case, Ld. CIT(A) was of the opinion that the liability to incur the expenditure arose during the year and the AO was not justified in holding it to be pertaining to prior period.- Decided in favour of assessee.
|