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2017 (7) TMI 174 - ITAT CHENNAIDisallowance of additional depreciation - Held that:- When an allowance which is ordinarily not available under normal commercial principles of accounting, is made specifically allowable, through enactment of certain specific provisions of the Act, it is also a requirement that there should be similar specific provision which shows its applicability every year, unless the context strongly calls for such an interpretation. We are thus of the opinion that CIT(Appeals) was justified in confirming the disallowance of additional depreciation. Software expenses should be treated as revenue in nature Royalty payment - nature of expenditure - revenue or capital - Held that:- Royalty amount received by the CRI Industries India Ltd., which was holding the brand “CRI” is not the point at issue either before the Department or before the Tribunal. Since the royalty amount paid by the assessee [User] to M/s. C.R.I. Amalgamation Pvt. Ltd. (Proprietor] was high, the Assessing Officer has made the disallowance. The assessee paid the royalty for exclusively using the trade mark “CRI” based on monthly turnover at the rate of 0.50%, which was duly agreed and executed a User Agreement between the proprietor and user. Therefore, the expenses incurred towards payment of royalty has been treated as revenue expenditure by the ld. CIT(A) for the assessment 2008-09, which was duly confirmed by the Tribunal against the appeal of the Revenue after elaborately discussing the facts Addition made towards implementation of oracle additional report development - Disallowance of improvement of software or purchase of software - Held that:- The assessee has filed the copies of invoices raised by M/s. Astral Consulting Ltd. and the payments are made for the information systems services rendered. There was no dispute that the payments were made for the purpose of improvement of the software consequent upon merger of other companies, which was necessitated to generate some reports in oracle application. Any expenditure incurred for the purpose of improvement of software or purchase of software that expenditure should be treated as revenue expenditure Disallowance made on account of dividend income - addition u/s 14A r.w.r. 8D - Held that:- The provisions of section 14A of the Act are not applicable to assessee’s case since the investment made in foreign subsidiaries and the income earned from the aforesaid investments have been offered to tax. Thus, we confirm the order passed by the ld. CIT(A) on this issue and dismiss the ground raised by the Revenue Levy penalty under section 271(1)(c) - Held that:- It is not a fit case to levy penalty under section 271(1)(c) of the Act and accordingly, confirm the order passed by the ld. CIT(A) in directing the Assessing to delete the penalty.
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