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TMI Blog2023 (7) TMI 1443X X X X Extracts X X X X X X X X Extracts X X X X ..... RI AMARJIT SINGH, ACCOUNTANT MEMBER For the Appellant : Ms. Zeenia Handa For the Respondent : Nitesh Joshi Sunil Jhunjhunwala ORDER Per Amarjit Singh (AM): This appeal filed by the revenue is directed against the order passed by the ld. CIT(A) NFAC, dated 14.03.2023 for A.Y. 2018-19. The assessee has raised the following grounds before us: 1. Whether on the facts and circumstances of the case and in law the Ld. CITIA) erred in deleting the disallowance made under Section 37(1) of the Act for an amount of Rs.2,01,96,568/- incurred towards software license expenses by considering the same as Revenue expenditure. 2. Whether on the facts and circumstances of the case and in law the Ld. CIT(A) has erred in considering the expenses incurred by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the year under consideration. On query, the assesse has given the detail of software expenditure vide its submission dated 07.01.2021 as reproduced at page 2 to 8 of the assessment order by the assessing officer. The assessee company explained that it had not received any enduring benefit from the use of the software. The assessee also submitted that it was not the owner of the software license and it had no right to sale or transfer or otherwise deal in the software. However, the AO has not agreed with the submission of the assessee and stated that similar addition was made in assessee s own case for assessment year 2016-17 and assessment year 2017-18 by treating the software license expenses of the nature of capital expenditure. Therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions of both the parties and and perused and carefully considered the material on record; including the judicial pronouncements cited. The issue for consideration before us is whether the expenditure of Rs. 28,62,118/- incurred by the assessee on Windows XP Professional software is revenue in nature as claimed by the assessee or capital expenditure as held by the learned CIT(A) in the impugned order. According to the learned A.R. for the assessee, the expenditure incurred for purchase of Windows XP Professional, is an application software, and therefore this expenditure would be revenue in nature and cannot be treated as capital in nature. We have perused the decision of the Coordinate Bench in the case of Boots Piramal Healthcare Ltd. (su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incurred to obtain user licence and confirmed the same. It was the contention of the assessee that these software, MS Windows 98 and MS Word 2000 have become obsolete very fast and the expenditure is revenue in nature and this claim is in line with the principle established by the Hon'ble Special Bench of the ITAT Amway India Enterprise vs. CIT 111 ITD 112 (Del) and also of the judgement of the Hon'ble P H High Court in the case of Varinder Agro 22 DTR 127. 16. We have considered the issue. As seen from the nature of expenditure these were amounts paid for obtaining MS Windows 98 and MS Word 2000 software for its office use and not a new software purchased alongwith computer. Since the nature of expenditure is revenue, in line with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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