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2015 (8) TMI 134 - BOMBAY HIGH COURTExpenses incurred in obtaining club membership - revenue v/s capital expenditure - Held that:- It is not in dispute that various decisions of the Tribunal had followed the decision of this Court in the matter of Otis Elevator Co. (India) Ltd. (1991 (4) TMI 53 - BOMBAY High Court a) and allowed entrance fees of club as revenue expenditure. Further, this Court has also in numerous matters applied the decision of Otis Elevator Co. (India) Ltd. (supra) to the cases were entrance fees of club membership was an issue in dispute and held that the same is allowable as revenue expenditure - Decided in favour of assessee. Computer software expenses - revenue v/s capital expenditure - Held that:- The expenses were incurred to obtain the application software which gets upgraded from time to time due to change in technology. This licence being for limited period would have to be renewed from time to time. In the aforesaid circumstances, the Tribunal held that considering the nature of the software licence i.e. application software, the same has to be allowed as a revenue expenditure. In view of the finding of fact arrived at further by the Tribunal that the expenses have been incurred on application software which is for a limited time frame and has to be renewed from time to time, we see no reason to entertain question B as framed by the revenue.- Decided in favour of assessee. Compensation paid by the assessee for pre-closure of agreement entered with M/s. Industrial Oxygen Limited (INOX) for supply of nitrogen - revenue v/s capital expenditure - Held that:- The contract was terminated by the respondent-assessee for commercial expediency as the quality if nitrogen gas and timely supplies by M/s. INOX was an issue leading to respondent setting up its own plant. The agreement was cancelled by the respondent-assessee approximately 10 months prior to the culmination of the agreement. Further the break up of the compensation which was paid to INOX for cancellation of the agreement was for compensation for fixed facility charges for the balance period of 10 months; compensation for short lifting of gas for the balance period of 10 months and compensation for pipe line rental paid to MIDC. Thus, the aforesaid heads of compensation were in the nature of revenue expenditure and not capital expenditure.- Decided in favour of assessee. Diallowance of Bad debts - ITAT allowed claim - Held that:- Yhe issue stands covered in favour of the assessee and against the revenue by the decision of TRF Ltd. (2010 (2) TMI 211 - SUPREME COURT). Accordingly, no reason to entertain question.- Decided in favour of assessee.
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