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TMI Blog2023 (11) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... rcise carried out by him. If he found the expenditure incurred by the assessee to be on higher side, it was incumbent upon him to specifically point out as to which expenses were not incurred for the purposes of business. No such exercises worth the name has been carried out. In our considered opinion, the Ld. CIT(A) was fully justified in deleting this addition made by the AO on ad hoc basis. This ground is therefore, not allowed Rationale adopted by the Tribunal in the earlier AYs, which was accepted by the coordinate bench of this court [ 2017 (7) TMI 172 - ITAT DELHI] . The deletion of disallowance was rightly ordered by the Tribunal. The said expenditure was claimable by the respondent/assessee under Section 37(1) of the 1961 Act. Depreciation on software - @25% OR 60% - HELD THAT:- As decided in own case [ 2017 (7) TMI 172 - ITAT DELHI] . Once it is found that the software used by the assessee were of standard nature to be used in computer hardware and not meant for any independent usage, such software qualify for depreciation @ 60%. We consider Appendix I to the Income-tax Rules containing rates of depreciation available for the purposes of income-tax, it beco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case and in law, Hon ble ITAT has erred in deleting the addition of Rs 1,34,48,062/- on account of Software expenses by treating it as Revenue Expenses. 7. It is not disputed by Mr Puneet Rai, learned senior standing counsel, who appears on behalf of appellant/revenue that the proposed question A stands covered by the decision of the coordinate bench rendered in Cargo Motors (P.) Ltd. v. Deputy Commissioner of Income-tax, [2022] 145 taxmann.com 641 (Delhi). 8. The proposed question A concerns the manner in which disallowance under Section 14A of the Income Tax Act, 1961 [in short, 1961 Act ] read with Rule 8D of Income Tax Rules, 1961 [in short, 1962 Rules] is to be calculated. In other words, whether only investments made to earn exempt income should be taken into account excluding other investments while calculating the disallowance. 9. Via the aforementioned decision, the coordinate bench has ruled that the disallowance calculated under Rule 8D of 1962 Rules should factor in only investments made by an assessee to earn exempt income. Therefore, the said proposed question of law need not be considered by us. 10. Insofar as proposed question B is conce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness consisted of a PR brand which was managed by the assessee company on behalf of its holding company, Benett Coleman and Co. Ltd till 30.09.2004. The holding company withdrew this right from the assessee company from 30.09.2004 and handed over this business to a new group company called Optimal Media solutions Ltd. After the termination of this line of business in the immediately preceding year, the assessee claimed not to have been engaged in rendering any services relating to Medianet Business. The assessee also furnished particulars of income earned by new company, M/s Optimal Media Solutions Lt., from the business. Similarly, regarding the sale of contents, the assessee submitted that this business hitherto entrusted to the assessee by its holding company was withdrawn w.e.f 1.10.2004. Necessary communications withdrawing the above business from the assessee were also furnished to the AO. In this backdrop of the facts, the AO noticed that albeit such business were not carried on by the assessee during the year, the overall expenses of the assessee were still on northwards sojourn. This was held on the strength of the percentage of the expenses to revenue at 62.85 for the AY ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the disallowance was made on the basis of past history. Since, in this year also identical facts are there so respectfully following the decisions of Hon ble ITAT and CIT(A) the disallowance made by the AO is hereby deleted. Hence, the ground of appeal is allowed. 13. We agree with the aforesaid rationale adopted by the Tribunal in the earlier AYs, which was accepted by the coordinate bench of this court. The deletion of disallowance amounting to Rs. 1,89,45,379/- was rightly ordered by the Tribunal. The said expenditure was claimable by the respondent/assessee under Section 37(1) of the 1961 Act. 14. As regards the proposed question C , it may be noted that the Assessing Officer (AO) took the view that depreciation on software should be calculated at the rate of 25% instead of 60%. 15. The CIT(A), following the decision taken by his predecessor for AY 2009-10, which was in favour of the respondent/assessee, deleted the disallowance. 15.1. The deletion of disallowance made by the CIT(A) was confirmed by the Tribunal by following its decision for AY 2006-07 to AY 2008-09. 16. It appears that vis- -vis this issue, the matter was not carried by the appellant/revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure is in the nature of revenue expenditure. The observations made by the coordinate bench are set forth hereafter: 4. In ITA No. 716/2017, another ground is urged by the Revenue as to the treatment to be given to the website expenditure. The AO had disallowed the assessee s claim that properly fell in the revenue stream holding that the expenditure resulted in the capital advantage of an enduring nature. Both the CIT and the ITAT upset the findings of the AO concurrently. The ITAT as follows: 24. After considering the rival submissions and perusing the relevant material on record, we find that this issue is no more res integra in view of the judgment of the Hon ble jurisdictional High Court in CIT vs. India Visit.com (P) Ltd. (2008) 219 CTR 603(Del) in which it has been held that the expenditure on development of website is a revenue expenditure. Similar view has been taken by the Tribunal in the assessee s own case for the immediately preceding year. Respectfully following the precedent, we uphold the impugned order on this issue. This ground fails. 5. This Court is of the opinion that since the reasoning in CIT v. India visit.com in ITA No. 1011/2008 dated 05 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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