TMI Blog2022 (6) TMI 1489X X X X Extracts X X X X X X X X Extracts X X X X ..... vii) of the Act and the assessee s case squarely falls under the provisions of section 195. The assessee is subject to TDS but failed to deduct the same. We confirm the orders of lower authorities on this issue and dismiss this ground of assessee s appeal. Similar are the facts for the assessment year 2012-13. Hence, taking a consistent view, we confirm the orders of lower authorities on this issue and dismiss this ground of assessee s appeal. Disallowance of expenses relatable to exempt income by invoking the provisions of section 14A r.w.rule 8D - HELD THAT:- Assessee stated that the assessee has received dividend income in regard to investment in shares of two foreign subsidiaries and this is admitted fact. We noted that the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le - 1, Chennai for the assessment years 2010-11 2012-13 u/s.143(3) r.w.s. 92CA of the Income Tax Act, 1961 (hereinafter the Act ) vide orders dated 20.03.2014 30.03.2014. 2. The first common issue in these two appeals of assessee is as regards to the orders of CIT(A) confirming the action of AO in making disallowance of expenses in respect of software development expenses paid to two entities in Mauritius for non- deduction of TDS u/s.195 of the Act and thereby made disallowance by invoking the provisions of section 195 of the Act and thereby made disallowance by invoking the provisions of section 40(a)(i) of the Act. For this issue, assessee has raised identically worded grounds in both the years and facts circumstances as admitted by ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d incentives. The AO noted from the ledger amount that this payment for software development consultancy charges was made to Esoftcom Mauritius Ltd., Num TV Limited, Mauritius and Blazeway LLC. The AO noted that the assessee has not deducted TDS under the provisions of section 195 of the Act and required the assessee to explain. The assessee explained vide letter dated 21.03.2013 stating that these are expenses that are incurred in foreign exchange for providing technical services abroad and these expenses are in the nature of pay roll for staff, conveyance and small purchases for the particular project which is being done abroad. It was stated that the vendor/customer makes payment directly to the concerned person and debit the same to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs. It is admitted that the payment abroad was made for 'software consultancy charge' which squarely falls within the definition of Fee for technical service' as per Sec.9(1)(vii) of the IT Act. The appellant's contention that the subsidiary company had no business connection in India is not acceptable in view of Explanation to Sec.9(2) in which it is clearly stated that the Revenue need not prove the business Connection of the payee in India for bringing it to tax u/s 9(1). In this case, the income has accrued and arisen to the foreign subsidiary company in India and therefore, TDS u/s 195 was warranted. Since the appellant has failed to comply with the said TDS provision, I concur with the AO's disallowance u/s 40(a)(i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirm the orders of lower authorities on this issue and dismiss this ground of assessee s appeal. Similar are the facts for the assessment year 2012-13. Hence, taking a consistent view, we confirm the orders of lower authorities on this issue and dismiss this ground of assessee s appeal for both the assessment years. 7. The next common issue in these two appeals of assessee is as regards to disallowance of expenses relatable to exempt income by invoking the provisions of section14A r.w.rule 8D of the Rules. For this, assessee has raised identically worded grounds in both the years, issue and facts are similar, as admitted by ld.counsel for the assessee as well as ld. senior DR. Hence, we will take the facts and issues from assessment yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imed by assessee at 60% treating the same as intangible asset. For this, assessee has raised following grounds:- 2.1 The Commissioner of Income Tax (Appeals) erred in restricting the depreciation claimed on digital content to 25% instead of 60%, treating the same as intangible assets. 2.2 The Commissioner of Income Tax (Appeals) ought to have noted that the digital content is software eligible for depreciation at a higher rate of 60%. 2.3 Alternatively, the Commissioner of Income Tax (Appeals) ought to have allowed the entire cost of digital content as revenue expenditure. 10. At the outset, the ld.counsel as well as ld.Senior DR admitted that this issue is covered by Tribunal s decision in assessee s own case in ITA Nos.1406 1407/Chny/2015 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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