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TMI Blog2015 (10) TMI 925X X X X Extracts X X X X X X X X Extracts X X X X ..... er appeal, same was for the subsequent years also. In our opinion there was no tangible material to reopen the assessment. Respectfully following the decision of Kelvinator of India Ltd. [2010 (1) TMI 11 - SUPREME COURT OF INDIA] we decide the effective grounds of appeal against the Assessing Officer. In our opinion order of the first appellate authority does not suffer from any legal infirmity, so, upholding it we dismiss the grounds of appeal filed by the Assessing Officer. - Decided in favour of assessee. - ITA No. 5758/Mum/2011 - - - Dated:- 21-7-2014 - SHRI VIJAY PAL RAO AND SHRI RAJENDRA, JJ. For the Appellant : Shri Sunil Agrawal For the Respondent : Shri Pritesh Mehta ORDER Rajendra (Accountant Member).- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pening of assessment. 2. The assessee-company, engaged in the business of life insurance, filed its return of income on October 29, 2005, declaring total income at ₹ 31.19 lakhs. The return was processed under section 143(1) of the Act on March 30, 2007. Later on a notice under section 147 of the Act was issued by the Assessing Officer. From the assessment records, the Assessing Officer found that the assessee had entered into an agreement with M/s. India Infoline Ltd. to pay software services amounting to ₹ 90 lakhs for information technology to be provided by it. As per the Assessing Officer, same were of enduring in nature and therefore the expenditure incurred by it had to be treated as capital expenditure, that the softw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re incurred for software is was a capital expenditure, that it included compute programme recorded on any disc/tape/perforated media or other information storage device. He held that expenditure incurred on software development of ₹ 90,00,000 was to be treated as capital expenditure. The Assessing Officer allowed depreciation of 60 per cent., i.e., ₹ 54,00,000. Finally, he made an addition of ₹ 36,00,000 (90,00,000 54,00,000) to the income of the assessee. He also made the addition under the head of business promotion expenses. Vide its order dated October 29, 2010, he determined the income of the assessee under section 143(2) read with section 147 of the Act at ₹ 69.77 lakhs. 4. Aggrieved by the order of the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the case of Rajesh Jhaveri Stock Brokers P. Ltd. [2007] 291 ITR 500 (SC) delivered by the hon'ble Supreme Court. The authorised representative stated that the matter was reopened because of the audit objection, that in the subsequent years similar disallowance was not made by the Assessing Officer, that in the reasons recorded by the Assessing Officer, there is no mention of existence of a tangible material. 6. We have heard the rival submissions and perused the relevant material on record. We find that in the case under consideration the Assessing Officer had reopened the assessment as she was of the opinion that the expenditure incurred by the assessee under the head software charges was of enduring in nature. In our opinion on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions from the companies against omission of the words 'reason to believe', Parliament reintroduced the said expression and deleted the word 'opinion' on the ground that it would vest arbitrary powers in the Assessing Officer. We quote hereinbelow the relevant portion of Circular No. 549, dated October 31, 1989 ([1990] 182 ITR (St.) 1, 29), which reads as follows : '7.2 Amendment made by the Amending Act, 1989, to reintroduce the expression reason to believe in section 147.-A number of rep resentations were received against the omission of the words reason to believe from section 147 and their substitution by the opinion of the Assessing Officer. It was pointed out that the meaning of the expressi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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