9911796707
TMI Blog2007 (8) TMI 736X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 4 in the Grounds of Appeal of the assessee] and the same may be disposed off by the Tribunal. Those grounds are stated as under:- (1)That both the Ld. Assessing Officer and the Ld. CIT(A) erred in holding that expenses of ₹ 36,400 on software development is a capital expenditure conferring the benefits of enduring nature. (2)That Ld. Assessing Officer Ld. CIT(A) erred in holding that the expenses aggregating to ₹ 53,389 on account of various payments to National Stock Exchange Ltd. are in the nature of penalty and hence cannot be allowed. 2. The facts relating to the issue of software development expense involved in 1st ground of the appeal of the assessee are that during the relevant assessment year, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the nature of revenue expenditure. 5.2 In the case of Addl. CIT v. Asahi India Safety Glass [2006] 6 SOT 656 (Delhi), the Tribunal has held that expenditure on acquisition of right to use and upgardation of computer software package for sophisticated accounting and management being aimed at running the business more profitably, is allowable revenue expenditure. 5.3 In the case of Bank of Punjab Ltd. v. Jt. CIT [2002] 122 Taxman 235 (Chd.) (Mag.), the Tribunal held that purchase of software is not an expenditure in capital field, as the assessee is required to change the software within a very short span of time may be a year or two and they become outdated because of change of system and change of technology. Computer system are c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A), the assessee contended that such penalties were normally in share brokering business and, therefore, the same should be allowed as revenue expenditure. 10. We have considered the submissions of both the parties, perused the records and carefully gone through the orders of the tax authorities below. 11. Before us, it has been contended by the learned AR for the assessee that the assessee company is stock/share broker and is a member of Delhi Stock Exchange. The assessee company has made these payments on account of violation of capital market regulation of the National Securities Clearing Corporation Limited which are termed by them as penalty points for which some amounts are paid by the assessee for late delivery, short deli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computer software problem, cannot be considered as infraction of law and if any fine is paid for such late submission, due to unavoidable circumstances in the regular course of business that cannot also be termed as penal in nature. Similarly, fine paid for delay in making the deliveries of shares due to deficiencies in the documents like non-matching of signatures, etc. cannot be considered penal in nature; irregularities of this type cannot be ruled out in such type of business and any fine paid for those irregularities cannot be considered as infraction of any law. So, the payments made by the assessee in the regular course of business, cannot be termed as penal in nature, particularly when the assessee did not commit those irregularitie ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
