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TMI Blog2017 (2) TMI 1209X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeals together and disposing of the same by this common order. 2. The appeals for assessment years 2004-05 and 2009-10 in I.T.A. No.1131 & 1132/Mds/2016 are concerned, there was a delay of 3 days in filing these appeals. The Revenue has filed a petition for condonation of delay. We have heard the Ld. Departmental Representative and the Ld.counsel for the assessee. We find that there was sufficient cause for not filing these appeals before the stipulated time. Therefore, we condone the delay and admit the appeals. 3. Shri R. Durai Pandian, the Ld. Departmental Representative, submitted that the first issue arises for consideration for assessment year 2004-05 is with regard to transfer pricing adjustment of Rs. 30,89,628/-. According to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion was not demonstrated by the assessee, therefore, the CIT(Appeals) is not justified in allowing the claim of the assessee. 5. On the contrary, Shri Raghunathan Sampath, the Ld.counsel for the assessee, submitted that the Transfer Pricing Officer found that the function performed by the assessee was erroneously taken into consideration by the Assessing Officer. According to the Ld. counsel, the installed capacity of the assessee was 7200 units in the assessment year 2004-05. However, the utilised capacity was only 200 units. Adjustment shall be made in respect of under utilization of the capacity. According to the Ld. counsel, trading and assembling operations should be aggregated and tested for arm's length price. Therefore, accordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ortant than the functionality test. Therefore, even though the assessee may not own the software but only pays licence fees, in view of functional and economic role the software plays in the business, the same has to be treated as capital expenditure. Accordingly, the addition made by the Assessing Officer to the extent of Rs. 33,63,810/- has to be confirmed. 9. On the contrary, Shri Raghunathan Sampath, the Ld.counsel for the assessee, submitted that in the assessee's own case, for the assessment years 2005-06, 2007-08 and 2008-09, this Tribunal had an occasion to consider the same. By an order dated 9th May, 2012 and 28th June, 2013, the assessee treated software expenditure as revenue in nature. The CIT(Appeals) by placing his relia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of four years. The Ld.counsel very fairly submitted that the Assessing Officer has fairly concluded that there is an enduring benefit, therefore, he may not have any objection to consider it as capital expenditure. 13. We have heard the Ld.counsel for the assessee also. Since the Ld.counsel for the assessee has very fairly admitted before this Tribunal that expenditure relating to imparting training and marketing skills to the employees of the assessee is enduring benefit spread over a period of four years, the CIT(Appeals) is not justified in allowing the claim of the assessee. Accordingly, the order of the CIT(Appeals) is set aside and that of the Assessing Officer is restored. 14. The next ground of appeal is with regard to software ..... X X X X Extracts X X X X X X X X Extracts X X X X
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