9911796707
TMI Blog2008 (6) TMI 327X X X X Extracts X X X X X X X X Extracts X X X X ..... l facts culled out from the statement of facts, stated in the memorandum of appeal, are as follows: 3. The assessee is a manufacturer of automobile components like air brakes and non-ferrous castings. The assessee-company filed its return of income for the assessment year 2001-02 declaring total income of Rs. 14,43,44,360. The assessee subsequently filed a revised return declaring the total income in a sum of Rs. 14,20,68,210. The assessee has purchased software to the tune of Rs. 47,57,664 and claimed the same as revenue expenditure. The Assessing Officer computed it as capital in nature and allowed depreciation. The assessee claimed that the interest income earned on inter-corporate deposits, SBI bonds, deposit on margin money and fixed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner of Income-tax (Appeals), the Revenue as well as the assessee filed separate appeals to the Income-tax Appellate Tribunal. The Tribunal by its common order, which is impugned in these appeals, set aside the orders of the authorities below and directed the Assessing Officer to decide the issue about the claim of the assessee on purchase of software components after obtaining necessary details for verification. In respect of the income earned from various deposits, as stated above, the Tribunal held that the assessee is entitled to deduction of 10 per cent. as per clause (baa) of the Explanation to section 80HHC of the Income-tax Act. In respect of the written back provision and exchange rate difference, the Tribunal held that they are no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... calculation of deduction under section 80HHC of the Income-tax Act, 1961?" 7. It is the submission of the learned counsel for the Revenue that the first question is squarely covered against the Revenue by the decision of this court in the case of CIT v. Southern Roadways Ltd.[2007] 288 ITR 15, wherein it was held that the upgradation of computers by changing certain parts thereby enhancing the configuration of the computers for improving their efficiency, but without making any structural alterations is not change of an enduring nature. The expenditure incurred by the assessee had, therefore, to be treated as revenue expenditure. 8. While deciding the issue, the Division Bench took note of the decisions in the cases of Alembic Chemical Wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reme Court in the case of CIT v. Lakshmi Machine Works [2007] 290 JTR 667, wherein it has been held as follows (page 683): "The principal reason for enacting a formula in section 80HHC of the Income-tax Act, 1961, is to disallow a part of the concession there under when the entire deduction claimed cannot be regarded as relating to exports. Therefore, while interpreting the words 'total turnover' in the formula in section 80HHC one has to give a schematic interpretation. The various amendments made therein show that receipts by way of brokerage, commission, interest, rent, etc., do not form part of business profits as they have no nexus with the activity of export. The amendments made from time to time indicate that they became necessary i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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