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TMI Blog2010 (10) TMI 563X X X X Extracts X X X X X X X X Extracts X X X X ..... o assessment year 2002-03. 2 Grounds of appeal no.1 by the assessee reads as under: "The CIT(A) erred on the facts and in law in treating computer software expenses to be of enduring benefit to the appellant and thereby treating it as capital expenditure. 3. Both the parties fairly conceded that this issue has to go back to the file of the Assessing Officer for fresh adjudication in the light of the decision of the Special Bench of the Tribunal in the case of Amway India Enterprises reported in 111 ITD 110(SB). We, therefore, restore this issue to the file of the Assessing Officer for fresh adjudication of the same in the light of the decision of the Special Bench (supra) and in accordance with law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The ground raised by the assessee is accordingly allowed for statistical purpose. 4. Grounds of appeal no.2 by the assessee reads as under: "The CIT(A) erred on facts and in law in confirming that the Assessing Officer was justified in adopting a view that the lump sum consideration paid for music rights is not entirely revenue in nature without appreciating the facts submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion that it directly flows from the AO's order that this amount needs to be amortized @ 20%. This would, therefore, cover a period of 5 years. The Assessing Officer is directed to amortize the same accordingly. 16. Para 4.5 of the grounds of appeal relate to non allowance of Rs.5,46,61,600/- on account of royalty on OSD disallowed in assessment year 2001-02. In this case, reference may be made to my order in the case of the appellant in appeal no. CIT(A)-XI/AC- 11(I)/IT-11/04-05 dated 17.10.2006. In such order, at paras 10, 11 and 12, I have decided the said matter and issued direction for amortization over a period of 5 years. This ground of appeal is, therefore, taken care of by virtue of such order." 4.4 Aggrieved with such order of the CIT(A) the assessee is in appeal before us. 5. After hearing both the parties, we find the Assessing Officer, following his order in the preceding year, in the case of the assessee, has disallowed the claim of expenditure of Rs.20,91,53,976/-. We find, the CIT(A), following his order for the preceding assessment year directed the Assessing Officer to amortise the expenditure over a period of 5 years. We find, similar issue had com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ining copyright by the assessee who was in the business of manufacturing pre-recorded cassettes was held to be revenue expenditure. In the case of M Subramaniam vs DCIT, 42 ITD 676 (Mad), it was held that the assessee is manufacturing pre-recorded cassettes and selling the same, was entitled to claim royalty paid to the owner of the copyright as revenue expenditure. 16. The ld DR however, pointed out that u/s 32 of the act w.e.f 1.4.199 in respect of any copyright owned and used by the assessee for the purpose of business, only depreciation can be allowed. It was submitted that in the decisions relied upon by ld counsel for the assessee, these aspect cannot be considered because these cases related to an assessment prior to 1.4.99. According to him, in the light of the aforesaid amendment, the assessee should be allowed depreciation at the appropriate rate and the entire expenditure cannot be allowed as revenue expenditure. 17. We find that by the Finance Act (No.2) 1998 w.e.f 1.4.99section32(1) has been amended and the amended provisions provide that in respect of copyright owned and used by the assessee for the purpose of business, the assessee would e entitled to claim d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce the assessee did not furnish the details required by the Assessing Officer regarding the loss suffered under the different heads, the Assessing Officer was of the opinion that the claim of loss made by the assessee cannot be entrained. He, accordingly, disallowed the claim of loss of Rs.2.64 crores. 7.2 Before the CIT(A), it was submitted that the claim had arisen on account of loan taken for meeting requirements of working capital such as purchase of imported raw materials etc. A part of the loan taken was used for the purpose of acquiring an asset. Relying on the provisions of sec. 43A, it was claimed as business expenditure. 7.3 However, the CIT(A) was not satisfied with the explanations given by the assessee and upheld the action of the Assessing Officer by holding as under: 19. I have considered the rival submissions and the materials on record. In the written submissions, it has been stated that the loan was not utilized for the purpose of which it was taken. We have stated about the relevant contention of the appellant here in under. In the written submissions, there is also an alternative plea that only a part of the total loan taken was utilized for purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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