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TMI Blog2017 (5) TMI 676X X X X Extracts X X X X X X X X Extracts X X X X ..... dras High Court in CIT v. Southern Roadways Ltd. [2007 (6) TMI 193 - MADRAS HIGH COURT]. No contrary decision was brought to our knowledge. Therefore, respectfully following the decision of the Hon’ble Madras High Court, we delete the addition made - Decided in favour of assessee. Disallowance of the salary paid to Smt. Seema Gupta by applying the provisions of section 40A(2)(b) - Held that:- It is not denied that Smt. Seema Gupta is the wife of son of one of the partners. She has been appointed as a supervisory staff. Under section 40A(2)(b)(iv) of the Act, the relative of the partner is regarded to be a person referred to in section 40A(2)(a) of the Act. The relative has been defined under section 2(41) of the Act which means in relati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 40A(3) of the Act. - I. T. A. No. 289/Lkw/2016 - - - Dated:- 31-1-2017 - P. K. Bansal (Accountant Member) For the Appellant : Rakesh Garg, Advocate For the Respondent : Rajnish Yadav, Departmental Representative ORDER P. K. Bansal (Accountant Member) 1. This appeal has been filed by the assessee against the order of the Commissioner of Income-tax (Appeals)-I, Kanpur dated March 1, 2016 relating to the assessment year 2012-13. In this appeal the assessee has raised as many as seven grounds. 2. At the outset the assessee has moved an application for admission of additional ground which reads as under : Because the Commissioner of Income-tax (Appeals) has erred on facts and in law in upholding the di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the one-time charges-DMS is of enduring nature and therefore, is capital in nature. The Assessing Officer therefore, disallowed the sum of ₹ 3,00,000 but allowed depreciation thereon. The facts remains that a disallowance of ₹ 2,10,000 was made. When the matter went before the Commissioner of Income-tax (Appeals), the Commissioner of Income-tax (Appeals) confirmed the said disallowance. 5. I have heard the rival submissions, carefully considered the same along with the orders of the tax authorities below. I have gone through the decision of the Hon ble Madras High Court in the case of CIT v. Karur Vysya Bank Ltd. [2015] 229 Taxman 396 (Mad), the copy of which was filed before me during the course of hearing and available at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eated as revenue expenditure. In view of the above, we hold that the Tribunal had rightly held that the expenditure incurred on software packages as a revenue expenditure. 5.1 In the instant case, I noted that the software has been developed by the principal company to be used by the distributor and names it as distributor's management software and by providing this software to the assessee, the principal M/s. Hero Moto Corps Ltd. billed the assessee with one-time charges-DMS. Thus, the assessee has been charged for the installation of the software package, which was designed by the principal company. The case of the assessee, in my opinion, is duly covered by the said decision of the Hon ble Madras High Court. No contrary dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is regarded to be a person referred to in section 40A(2)(a) of the Act. The relative has been defined under section 2(41) of the Act which means in relation to an individual, the husband, wife, brother or sister or any lineal ascendant or descendant of that individual. Wife of son of the partner does not fall within the definition of the relative as defined under sub-section (2) of section 41 of the Act. In view of this fact the provisions of section 40A(2)(b), in my opinion, are not applicable. I, therefore, delete the addition of ₹ 31,595. Thus, ground Nos. 3, 4 and 5 are allowed. 9. Ground No. 6 is general in nature and do not require any specific adjudication therefore, the same is dismissed. 10. Ground No. 7 relates to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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