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TMI Blog2021 (9) TMI 1151X X X X Extracts X X X X X X X X Extracts X X X X ..... /2013 for the assessment years 2007-08 and 2008-09. 2. The above appeals were admitted on 14.07.2015 on the following substantial questions of law :- 1. Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the software expenses incurred by the assessee were revenue expenditure? 2. Is not the finding of the Tribunal bad by holding that the claim of license fee on software expenses paid to its parent company was for the utilization of the software which gave a enduring benefit and therefore capital in nature? 3. Heard Mrs. R.Hemalatha, Learned Senior Standing Counsel appearing for the appellant-Revenue and Mr. R.Sivaraman, Learned Counsel for the respondent-assessee. 4. The assessee is engag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplying the functional tests by relying upon the decision of the Hon'ble Supreme Court in Tata Consultancy Services Ltd -vs- State of Madhya Pradesh reported in 271 ITR 401 (SC). Accordingly, the Assessing Officer relies on the decision of the ITAT, Delhi in the case of Amway India Ltd. -vs- Deputy Commissioner of Income-tax, Circle1(1), New Delhi reported in 2009 27 SOT 344 (Delhi). 6. Aggrieved by the same, the assessee preferred appeals before the Commissioner of Income Tax (Appeals)-IX, Chennai (CIT), who by orders dated 27.12.2012 allowed the assessee's appeals, after noting the decision of the Tribunal in the assessee's own case for the assessment year 2005-06 in I.T.A.No.612/Mds/2011, dated 09.05.2012. 7. Aggrieved by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny new system of facility of enduring nature. 10. In such circumstances, we find that the Tribunal was right in confirming the order passed by the CIT(A). We note the decision, which was referred to by the Tribunal in the case of CIT Vs. Raychem RPG Ltd. reported in [2012] 21 Taxmann.com 507 (Bombay). Wherein the ERP package software, which facilitated the assessee's trading operation to conduct its business more efficiently or more profitably but was held to be not in the nature of 'profit-making apparatus' and the software expenditure was allowable as revenue expenditure. 11. With regard to the license fee, which was for acquiring a software license of shelf life of less than two years was held to be as allowable as revenue expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ware was to operate the Windows platform, which will go to show that it has not been customised for a particular requirement. Similar decision taken in KGISL Technologies and Infrastructures Private Limited Vs. Assistant/Deputy Commissioner of Income Tax, Company Circle-V, Chennai [decided on 27.11.2018 in TCA Nos.73 to 74 of 2011], wherein the Court, apart from taking note of decision in Alembic Chemicals Works Co. Ltd Vs. CIT, noted the decision in CIT Vs. Southern Roadways Ltd decided on 07.10.2006 in T.C.(A). No. 2454 of 2006 and decided the substantial questions of law in favour of the assessee by treating the expenses incurred in developing/upgrading the software to be revenue expenditure. 12. In the light of the above discussions, w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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