2020 (8) TMI 769

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..... first substantial question of law has been answered against the revenue in 'COMMISSIONER OF INCOME-TAX VS. HCL TECHNOLOGIES LTD.' [ 2018 (5) TMI 357 - SUPREME COURT ] whereas the second substantial question of law has also been answered against the revenue by Supreme Court in 'COMMISSIONER OF INCOME-TAX VS. YOKOGAWA INDIA LTD. [ 2016 (12) TMI 881 - SUPREME COURT ] Expenditure incurred towards acquisition of software - Whether expenditure incurred towards acquisition of software is only a right to use for a limited period and no property or right of permanent character is being acquired and hence expenditure incurred is capital in nature? - HELD THAT:- The expenses are incurred for application of software, the third substantial .....

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..... ards acquisition of software is only a right to use for a limited period and no property or right of permanent character is being acquired and hence expenditure incurred is capital in nature, without taking into consideration that by acquiring licence the assessee has a benefit of enduring nature for number of years and the same constitutes tool in the trade and liable to be treated as capital asset and consequential depreciation is allowable? 2. Facts leading to filing of this appeal briefly stated are that assessee is engaged in the business of software development and consultancy services. The assessee filed the return of income for the Assessment year 2007-08 claiming deduction under Section 10B of the Act. The Assessing Officer by an o .....

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..... lso held that the assessee has incurred expenditure only towards acquiring the right to use the software for a limited period and no property of right of permanent character is being acquired and the same was allowed as revenue expenditure. Being aggrieved, the revenue is in appeal before us. 3. At the outset, learned counsel for the revenue fairly submitted that first substantial question of law has been answered against the revenue in 'COMMISSIONER OF INCOME-TAX VS. HCL TECHNOLOGIES LTD.', (2018) 404 ITR 719 (SC), whereas the second substantial question of law has also been answered against the revenue by Supreme Court in 'COMMISSIONER OF INCOME-TAX VS. YOKOGAWA INDIA LTD.', (2017) 391 ITR 274 (SC). However, with reference .....

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