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TMI Blog2022 (7) TMI 272X X X X Extracts X X X X X X X X Extracts X X X X ..... isallowance being the depreciation on such software development expenses. We find that since the disallowance of software development expenses in the original assessment was made on account of non deduction of TDS, which is a specific provision in the shape of a penal provision whereby the disallowance is made if the assessee fails to deduct TDS at source. AO did not make the addition on account of doubtful nature or non genuineness of the expenditure, therefore, the depreciation on such expenditure disallowed by passing u/s. 154 is not justified as there was no mistake apparent from record found in the original assessment order. Had it been a case of disallowing expenditure of software development due to the findings that such expenditu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Because the CIT(A) has erred on facts and in law in arbitrarily upholding that the expenditure claimed by the assessee on software development is not an aflpwabie expenditure. 05. Because the ITAT having granted registration u/s 12A of the Act, 1961 for Asstt. Year 2009-10 vide order dated 21/03/2016 and the same being applicable to pending proceedings, in terms of the proviso to section 12A, the income of the assessee would be mpt u/s 11 of the Act, the addition made by the Assessing Officer and upheld by the CIT(A) be deleted, and the order passed by the Assessing Officer u/s 154 and upheld by the CIT(A) be quashed. 2. At the outset, the ld. AR invited our attention to copy of paper book pg.67 where a petition for admission o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of Section 154(1A) are applicable only where the subject matter in the assessment order and the issue of rectification u/s. 154 are same and therefore it was prayed that the additional ground taken by the assessee may be dismissed. 6. We have heard rival parties and have gone through the material placed on record. We find that it is a fact that the original order u/s. 143(3) was passed on 30.12.2010 and such order was challenged before ld. CIT(A) who vide order dated 09.11.2012 dismissed the appeal of the assessee. Vide assessment order dated 14.10.2013, the Assessing Officer passed order u/s. 154 with the following findings: 7. We find that Assessing Officer in the order passed u/s. 154 disallowed the depreciation on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of tax and not for non-proving the genuineness of expenses. As such, the action of the Assessing Officer in the proceeding u/s. 154, disallowing depreciation on such software development expenses, cannot be sustained. Therefore, it was prayed that the rectification u/s. 154 is not justified and therefore, it was prayed that appeal of the assessee may be allowed. 9. The ld. DR, on the other hand, relied on the orders of the authorities below. 10. We have heard rival parties and have gone through the material placed on record. We find that in the original order dated 31.12.2020 the Assessing Officer had disallowed an expenditure of Rs.16,52,800/- for violation of provisions regarding tax deduction at source and the disallowance was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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