9911796707
TMI Blog2018 (4) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... x at source on purchase of software capitalized in books of account. - Decided in favour of assessee. - ITA No. 1199/Bang/2016 - - - Dated:- 26-12-2017 - SHRI VIJAY PAL RAO, JUDICIAL MEMBER And SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER Appellant by : Shri Suman Lunkar, CA. Respondent by : Shri S.Nambirajan, Addl.CIT(DR) ORDER Per Inturi Rama Rao, AM : This is an appeal filed by the assessee directed against the order of the learned Commissioner of Income-tax (Appeals)-7, Bengaluru,[CIT(A)] dated 01/03/2016 for the assessment year 2010- 11. 2. The assessee raised the following grounds of appeal: 1. The learned Assessing Officer had erred in passing the order in the manner passed by him and the learned Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of tax at source on the said payments, the amount otherwise allowable as revenue expenditure is to be disallowed u/s 40(a)(ia) of the Act. The conclusion drawn and direction given by the CIT(A) being contrary to facts and law applicable are to be disregarded. 6. The learned CIT (A ) has erred in making various observations findings in the appellate order. The observations findings made being totally on erroneous appreciation of facts and the law applicable are to be rejected in toto. 7. The appellant has rightly treated the purchase or software as capital asset and claimed depreciation thereon. The claim of appellant being correct both on facts and law is to be allowed as such. 8. The appellant denies the liability to pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upheld the action of the AO in the light of the decision of the Hon'ble jurisdictional High Court in the case of Samsung Electronics Co. (2011) 203 Taxman 477(Kar). 5. Being aggrieved, the assessee is in appeal before us. 6. Learned AR of the assessee submitted that the provisions of section 40(a)(ia) have no application in case of purchase of capital assets. Reliance in this regard was placed on the following decisions: i. SKOL Breweries Ltd. vs. ACIT (2013)(29 taxmann.com 111)(Mumbai-Trib.) ii. Dy.CIT vs. SMS Demag (P) Ltd. (ITA No.3636/Del/2008(ITAT Delhi) iii. CIT vs. Mark Auto Industries Ltd. (2013) 40 taxmann.com 482 (P H) iv. Subex vs. Dy.CIT(68 taxmann.com 233)(Bang) On the other hand, the ld. Ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of deduction of depreciation on technical know-how as the assessee failed to deduct tax in accordance with the provision contained in section 40(a)(i). The finding of the learned CIT(A) was that the assessee had incurred expenditure by way of technical knowhow, which was capitalized amount as made in the return of income. Since the assessee had not claimed deduction for the amount paid, the provisions contained in section 40(a) (i) were not attracted. The learned DR could not find any fault with this direction of the CIT(A) also although she referred to page 4 of the assessment order, where it was mentioned that the tax deducted in respect of the payment was made over to the Government in the subsequent year and, therefore, depr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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