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TMI Blog2022 (8) TMI 1568X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing officer in not allowing interest of Rs. 6,17,581/-.. 2. That on the facts and in the circumstances of the case the CIT erred in upholding disallowance of software development expenses amounting to Rs. 19,93,650/- alleging the same to be capital in nature. 3. That on the facts and in the circumstances of the case the CIT (A) erred in upholding the action of the assessing officer in increasing the amount of long term capital gains computed by the appellant by an amount of Rs. 4,92,611/- alleging that benefit of indexation is not available to the appellant. 3.1 That on the facts and in the circumstances of the case the CIT (A) erred in not holding that Explanation to section 73 of the Act was not applicable to the facts of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and upgradation/modification. The ld. counsel for the assessee stated that these expenses were incurred in order to adapt various functions relating to billing in view of the latest technological changes for more efficient and smooth usage of the same in the running of the business operations. 10. The ld. counsel for the assessee further stated that these expenses did not add to the profit earning apparatus of the assessee and only facilitated carrying on the business more efficiently and profitably. In support of his contention, strong reliance was placed on the decision of the Special Bench of the Tribunal in the case of Amway India Enterprises111 ITD 112 and Asahi India Safety Glass Ltd 346 ITR 329. 11. Per contra, the ld. DR strongly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed. 15. Ground No. 3 relates to the upholding of the action of the Assessing Officer in increasing the amount of long term capital gains computed by the assessee by an amount of Rs. 4,92,611/- by denying benefit of indexation. 16. During the course of scrutiny assessment proceedings and on perusal of computation of income, the Assessing Officer found that the assessee has shown long term capital gain of Rs. 35,14,290/-. On further examination, the Assessing Officer came to know that the assessee has purchased 1,42,400 shares of Design Expo Network [P] Ltd on 16.05.2000 at cost price of Rs. 1 crore. 17. The Assessing Officer further noted that the assessee sold these shares on 07.08.2001 for a consideration of Rs. 1,40,06,901/- on wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the findings of the ld. CIT(A). 23. In our considered opinion, Explanation to Section 73 of the Act is not at all applicable on the facts of the case in hand. Firstly, because the assessee is engaged in marketing and distribution of entertainment software and production of TV serials and is also engaged in distributing pay channels and secondly, admittedly, there is no loss in the transaction of sale of shares. In fact, there is long term capital gain returned by the assessee. 24. On these facts, we do not find any merit in the application of Explanation to Section 73 of the Act. The Assessing Officer is directed to delete addition of Rs. 4,92,611/-. Ground No. 3 is, accordingly, allowed. 25. Ground No. 4 relates to the denial of set o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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