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TMI Blog2018 (12) TMI 1611X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the Revenue. Nature of expenditure - expenditure for acquisition of new software - revenue or capital expenditure - Held that:- Tribunal found that software is to be revised on a regular basis and cannot be considered as a permanent asset. We agree with the Tribunal, especially considering the technological advancement made at a fast pace and the need to upgrade the software regularly for better facilitation of banking services. The software is also used for the banking facilities and hence we are clearly of the opinion that the same can be considered as revenue expenditure. The last question is also answered in favour of the assessee Addition u/s 14A - scope of amendment introduced by the Finance Act, 2001 with retrospective e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e based on the population, the reference to population has to be related to a Revenue Village and not to Wards within a local authority, which would even bring in certain Wards within a municipal area also within the classification of a rural branch. Following the aforesaid dictum of another Division Bench, we have to set aside the order of the Tribunal in so far as the interference caused to the Assessing Officer's order and disallowance carried out of ₹ 1,69,63,402/- has to be upheld. The second question hence is answered in favour of the revenue - ITA Nos.533, 709, 861, 1195 & 5 1222 of 2009 - - - Dated:- 12-12-2018 - Mr. K. Vinod Chandran And Mr. Ashok Menon, JJ. Sri.P.K.R.Menon, Sri.Jose Joseph For The Appellant. Sr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adi Bank Ltd. [(2003) 264 ITR 545 (Ker)]. The second question is also answered in favour of the assessee and against the Revenue. 3. The last question is on whether the Tribunal was correct in having treated the expenditure for acquisition of new software as revenue expenditure. The Tribunal found that software is to be revised on a regular basis and cannot be considered as a permanent asset. We agree with the Tribunal, especially considering the technological advancement made at a fast pace and the need to upgrade the software regularly for better facilitation of banking services. The software is also used for the banking facilities and hence we are clearly of the opinion that the same can be considered as revenue expenditure. The last ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Bank of India. The said valuation has been upheld by this Court in Nedungadi Bank Ltd. [supra]. Hence that question is also answered in favour of the assessee and against the Revenue. 7. ITA No.1222 of 2009 arises from the assessment year 1999-2000 and raises the following questions of law: (i) Whether, on the facts and in the circumstances of the case and also in the light of Section 14A of the Income Tax Act introduced by the Finance Act, 2001 with retrospective effect from 01.04.1962, the assessee is entitled to claim the expenditure in respect of income which does not form part of total income? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal is right in deleting the addition made by the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the decision of the Hon'ble Supreme Court in Vijaya Bank Ltd. v. Commissioner of Income Tax And Another [(2010) 323 ITR 166 (SC)]. 10. It is to be noticed that as of now we are only dealing with the Revenue's appeal and such an issue does not arise from the Tribunal's order. The assessee Banks have also not raised such an issue before the Tribunal for the particular assessment year. Hence this Court cannot permit such an alternate plea in an appeal by the Revenue. 11. ITA No.533 of 2009 from the assessment year 2001-2002 raises only the applicability of Section 14A for the said year. This has already been held against the Revenue and in favour of the assessee for the years prior to 2007-2008. We follow the same here too ..... X X X X Extracts X X X X X X X X Extracts X X X X
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