9911796707
TMI Blog2024 (8) TMI 970X X X X Extracts X X X X X X X X Extracts X X X X ..... . 629 and Rs. 6,591 under section 194C and 194J, respectively. There is no material contrary to the assessee s submission that the relevant details were submitted before the CIT(A) in this regard and 30% of Rs. 98,363, i.e. Rs. 29,063 was disallowed in its computation of income by the assessee. Such being the facts, we are of the considered view that the learned CIT(A) has rightly deleted the disallowance made by the AO u/s 40(a)(ia) of the Act, and found disallowance of 30% of the total payments to be unjustified. Accordingly, the order passed by the learned CIT(A) on this issue is affirmed. - Decided against revenue. - Shri B.R. Baskaran, Accountant Member And Shri Sandeep Singh Karhail, Judicial Member For the Assessee : Shri Nitesh Joshi/Ms Sonakshi Jhunjhunwala For the Revenue : Shri Surendra Meena, Sr. DR ORDER PER SANDEEP SINGH KARHAIL, J.M. The present appeal has been filed by the Revenue challenging the impugned order dated 29/01/2024, passed under section 250 of the Income Tax Act, 1961 ( the Act ) by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [ learned CIT(A) ], for the assessment year 2017-18. 2. The brief facts of the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt towards license fees is charged by the service provider on periodical basis. Accordingly, as per the assessee, it has not obtained any enduring benefit from the use of the aforementioned software, and expenditure incurred is recurring in nature. The AO, vide assessment order, did not agree with the submissions of the assessee, and held that the expenses claimed by the assessee are capital expenditure, as it is an intangible asset . Accordingly, the AO disallowed the claim of software license fees and added the same to the total income of the assessee. 5. The learned CIT(A), vide impugned order, following the decision of the coordinate bench of the Tribunal in assessee s own case for the assessment year 2010-11 deleted the disallowance based on treating the software license expenditure as capital in nature. 6. We find that the issue whether software license expenditure incurred by the assessee is revenue or capital expenditure, is recurring in nature and has been decided in favour of the assessee by the coordinate bench of the Tribunal in preceding years. We find that in DCIT v/s M/s First Advantage Private Limited, in ITA No. 6659/Mum./2013, for the assessment year 2010-11, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duly taken into consideration all the relevant factors for deciding the expenditure to be a revenue expenditure. In this regard, reliance placed by the assessee on the case of Raychem RPG Ltd. (supra) is also appropriate, therein the Hon'ble jurisdictional High Court upheld the decision of the Tribunal in allowing software expenditure as a revenue expenditure. 7. Similar findings were rendered by the coordinate bench of the Tribunal in assessee s own case for the assessment years 2005-06, 2009-10 and 2018- 19, and the software license expenditure was held to be revenue in nature. The learned Departmental Representative ( learned DR ) could not show us any reason to deviate from the aforesaid decision rendered in assessee s own case and no change in facts and law was alleged in the relevant assessment year. Thus, respectfully following the order passed by the coordinate bench of the Tribunal in assessee s own case cited supra, we find no infirmity in the impugned order in treating the software license expenditure as revenue in nature. As a result, ground no. 1 raised in Revenue s appeal is dismissed. 8. The issue arising in ground no. 2, raised in Revenue s appeal, pertains to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the government treasury, except to the short deduction as mentioned in the below paragraph. 6.3 While complying with the TDS provisions on the above entire expenditure, the Appellant had short deducted the TDS of Rs. 629 under Section 194C of the Act and Rs. 6,591 under Section 194J of the Act. The details of the same are as under: .. 6.4 On perusal of the above table, your Honors would note that total amount of TDS short deducted under Section 194C of the Act is Rs. 629 [Refer Total 'A' in Colum F] and TDS short deducted under Section 194J of the Act is Rs. 6,591 [Refer Total 'B' in Colum F]. Thus, considering the above short deducted of TDS, the Appellant had suo moto disallowed an amount of Rs. 29,509 under Section 40(a)(ia) of the Act (ie. 30% of the corresponding expenses on which TDS is short deducted) while filing its return of income. 6.5 It is to be noted that the Appellant has made compliance to the TDS provisions on the entire amount of Rs. 30,35,48,419 and the same has been duly verified by the tax auditor. Further, findings of the tax auditor on non-compliance was limited to the aforesaid short deduction of TDS as tabulated above. Copy of the tax audit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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