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TMI Blog2012 (10) TMI 435X X X X Extracts X X X X X X X X Extracts X X X X ..... ee contended that expense has been incurred only on licence to use the software and that it was mere upgradation of the software – Held that:- Expenditure on account of software does not form part of the profit making apparatus of the assessee and the same is to enable the management to conduct the assessee’s business more efficiently or more profitably and following the decision in case of Raychem RPG Ltd. (2011 (7) TMI 953 - BOMBAY HIGH COURT) direct the AO to allow the software expenditure as Revenue in nature. Issue decides in favour of assessee Disallowance u/s 40(a)(ia) – Non deduction of TDS – Assessee has not deducted TDS on payment of lease rent – Held that: As the assessee has paid entire lease rent on 20-05-2005 could not be controverted revenue. Since no amount of the lease rent is payable as on 31-03-2006, therefore, in view of the decision in case of Merilyn Shipping and Transport (2012 (4) TMI 290 - ITAT VISAKHAPATNAM), no disallowance u/s. 40(a)(ia) can be made. Issue decides in favour of assessee - ITA NO. 1430/PN/2010 - - - Dated:- 17-7-2012 - Shri Shailendra Kumar Yadav and Shri R.K. Panda, JJ. Assessee by : Sri Nikhil Pathak Department by : M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e CIT(A). Referring to the decision of the Mumbai Bench of the Tribunal in the case of Hansraj Mathuradas Vs. ITO vide ITA No. 2397/M/2010 order dated 16-09-2011 he submitted that no disallowance of the expenses can be made where fringe benefit tax has been paid by the assessee on the said expenses. The learned DR on the other hand heavily relied on the order of the AO and the CIT(A). 7. We have considered the rival arguments made by both the sides, perused the orders of the AO and the CIT(A) and the Paper Book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find although the assessee had not stated before the AO regarding the payment of fringe benefit tax he has argued before the learned CIT(A) that no disallowance could be made when fringe benefit tax has been paid on account of such travelling expenses. The submission of the assessee before the learned CIT(A) that fringe benefit tax has been paid by the company on the foreign travelling expenses remains uncontroverted by the department. It has been held by the Mumbai Bench of the Tribunal in the case of Hansraj Mathurdas Vs ITO (Supra) that Circular No. 8/2005 dated 29-08-2005 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aad pro 2005 + staad. Etc. + section wizard 22-11-2005 1,48,500/- 2. Aura Software Pvt. Ltd. Autodesk Autocad Revit Series Commercial License pack of 3 and autodesk autocad L T 2006 pack of 5 08-11-2005 2,92,000/- 3. Logix Consultance Group Pvt. Ltd., Mcafee Active Virus Scan Suite 16-01-2006 32,749/- 4. Mayuresh Infotech Pvt. Ltd. Upgradation of Shree Lipi 3.0 to Devrat Universal 6.0 19-01-2006 4,721/- 5. Pavan Computers Pvt. Ltd., Ram Hard Disk 28-02-2006 13,000/- 6. Winsoft Tech India Pvt. Ltd., Safexim Digital Signature Software Solution 21-03-2006 6,000/- Total 4,96,970/- 11. Relying on the decision of the Special Bench of the Tribunal in the case of Amway India Enterprises Vs. DCIT reported in 111 ITD 112 (Special Bench) it was submitted that the expenditure should be allowed as Revenue expenditure. Various other decisions were also relied on by the assessee. 11.1 However, the learned CIT(A) was not convinced with the explanation given by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wable as revenue expenditure . 12.1 Referring to the above he submitted that since the software expenditure incurred by the assessee is for running the business more efficiently, therefore, in view of the decision of the Jurisdictional High Court the expenditure should be treated as Revenue in nature. 12.2 The learned DR on the other hand heavily relied on the order of the AO and the CIT(A). 13. We have considered the rival arguments made by both the sides, perused the orders of the AO and the CIT(A) and the Paper Book filed on behalf of the assessee. We have also considered the decision of the Jurisdictional High Court in the case of Raychem RPG Ltd. (Supra). We find merit in the submission of the learned counsel for the assessee that the expenditure on account of software does not form part of the profit making apparatus of the assessee and the same is to enable the management to conduct the assessee s business more efficiently or more profitably. In view of the above and respectfully following the decision of the Jurisdictional High Court in the case of Raychem RPG Ltd. (Supra) we set-aside the order of the CIT(A) and direct the AO to allow the software expenditure as Re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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