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TMI Blog2024 (5) TMI 590X X X X Extracts X X X X X X X X Extracts X X X X ..... allowance made u/r 8D(2)(ii). TDS u/s 195 - Disallowance u/s 40(a)(i) - assessee has paid an amount in foreign currency towards domain name registration - HELD THAT:- The registrar is merely a facilitator in connecting the applicant to the registry database to check uniqueness of domain name. Once the uniqueness of applied domain name is checked, the registration of domain name is automatic on the payment of requisite fee. He has recorded a factual finding that the user of domain name has not even iota of knowledge about the code piece/computer program. Therefore, there cannot be any question of its usage/exploitation. The assessee has merely got right to use the functionality based on the computer program and not the computer program itsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owever, on each and every time, the appeal got adjourned due to absence of the assessee despite several notices of hearing being issued to the assessee through various modes. These facts show complete lack of interest on the part of the assessee to pursue the present appeal. Therefore, we proceed to dispose of the appeal ex-parte qua the assessee after hearing learned Departmental Representative and based on the materials available on record. 3. In ground nos. 1 to 4, the Revenue has challenged partial relief granted by learned first appellate authority in the matter of disallowance made under section 14A of the Income-tax Act, 1961 (in short the Act ) read with Rule 8D of the Income Tax Rules, 1962 (in short the Rules ). 4. Briefly the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plus interest free funds to take care of the investments in exempt income yielding assets. Therefore, following certain judicial precedents, including the decision of Hon ble Bombay High Court in case of CIT Vs. HDFC Bank Ltd., (2014) 366 ITR 505 (Bom), he held that disallowance of interest expenditure under Rule 8D(2)(ii) is unsustainable. As regards disallowance of administrative expenses under Rule 8D(2)(iii), he sustained the disallowance. 5. We have heard learned Departmental Representative and perused the materials on record. The factual finding of learned first appellate authority that the assessee had enough surplus interest free funds to take care of the investments made in exempt income yielding assets could not be controverted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x under section 195 of the Act. The assessee contested the disallowance before learned first appellate authority. 8. After considering the submissions of the assessee in the context of facts and materials on record, learned first appellate authority concluded that the payment made is neither in the nature of royalty, nor FTS. Accordingly, he deleted the disallowance. 9. We have considered the submissions of learned Departmental Representative and perused the materials on record. Undisputedly, the payments made by the assessee are towards domain name registration. After examining the process of registration of domain name, learned first appellate authority has recorded a factual finding that the assessee has limited right to make a query in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed first appellate authority, it becomes quite clear that the payments made were not for use or right to use of any software, equipment, process etc. The Revenue has failed to bring any cogent evidence on record to controvert the factual finding of learned first appellate authority and establish on record that the payment made is for use or right to use of any computer software/program, equipment/process etc., as defined under section 9(1)(vi) of the Act. That being the case, we concur with the decision of learned first appellate authority on the issue. Grounds are dismissed. 11. Ground no.7, being a general ground, is dismissed. 12. In the result, the appeal is dismissed. Order pronounced in the open court on 10th May, 2024 - - TaxTMI - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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