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TMI Blog2013 (7) TMI 738X X X X Extracts X X X X X X X X Extracts X X X X ..... ME TAX Versus M/S ASAHI INDIA SAFETY GLASS LTD. [2011 (11) TMI 2 - DELHI HIGH COURT] - Decided against Revenue. - TAX APPEAL NO. 186 OF 2013 - - - Dated:- 1-4-2013 - AKIL KURESHI AND MS. SONIA GOKANI, JJ. For the Appellant : Manav A. Mehta. ORDER:- PER : Akil Kureshi Revenue is in appeal against the judgment of the Income Tax Appellate Tribunal ("the Tribunal" for short) dated 21.9.2012. Following question has been presented for reconsideration:- "Whether on the facts and circumstances of the case and law, the Hon'ble Tribunal erred in not considering the expenditure of software support and maintenance charges as capital expenditure?" 2. Issue pertains to expenditure of Rs. 1.02 crores (rounded off) expended by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation charges wherein total expenditure under this head was mentioned at Rs. 97,75,000/- as against Rs. 1,02,83,705/- debited in the Profit Loss Account under the head Software Support maintenance charges. However, no explanation/justification were filed by the assessee regarding allowability of such expenditure. Software development is a capital expenditure and, therefore, it will not find place in the Profit Loss Account. It gives an enduring benefit to the assessee and, therefore, the same comes very well within the meaning of capital expenditure. As stated above, since the software development and maintenance charges of Rs. 1,02,83,705/- is capital expenditure in nature and is not allowable as revenue expenditure, the same is disa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clusive test which the courts can apply almost by rote-what is required to be seen is the real intent and purpose of the expenditure and whether the expenditure results in creation of fixed capital for the assessee. In the case in hand, from the services as provided by the service provider no fixed capital for the assessee is created. Moreover, the software developed during the course of providing services would remain under control and ownership of the service provider. The assessee would not have any right on the same. In this view of the matter, we do not find any infirmity into the order passed by Ld. CIT(A). This ground of Revenue's appeal is dismissed." 5. Having heard learned counsel Mr. Manav Mehta for the appellant and having per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (vi) Information technology security services. For example controlling the data theft, monitoring of data; providing checks' on unauthorized access to the data etc. (vii) Services provided in connection with the facilitating and assisting communication through technology like providing software support for conferencing, maintaining EPBX systems for smooth communication with the branches situated all over India of the company, services provided for sharing of data with the branches as per the direction of the company, maintenance of websites for the clients, etc. (viii) Web hosting services, for example services provided for domain management and management of space, internet and internet Protocol address management etc." ..... X X X X Extracts X X X X X X X X Extracts X X X X
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