|
II. Direct Tax Case laws:
1. Oracle India Pvt. Ltd vs. CIT, ITA No. 25/2013, Date of Order : 25.11.2013, Delhi High Court.
Whether expenditure on acquiring master copy of software subject to obsolescence is allowable as revenue expenditure.
Held Yes
The
assessee’s claim that the master copies had high accelerated
obsolescence and that even at the point of time of import it was
difficult to say whether the version would be replaced by a new or
updated version after one day or a month had not been disproved. Also
the facts showed that there were periodical imports of the master copies
and that the average price per copy was minimal. This was not a case
where the master copies contained operating or system software, which
normally did not require frequent up-gradation or changes. It is also
not the case of an assessee which is the end user of software. It is a
case where the assessee is required to repeatedly pay for the master
copy media in view of frequent newer or updated versions of the
application software from time to time. Once newer or better version of
the application software is available, the earlier version is not
saleable and does not have any market value for the seller i.e. the
assessee. Also, as per the “matching concept” in accountancy, while
determining whether expenditure is capital or revenue in nature, the
question whether the expenditure would create an asset which is of value
in further assessment periods and should be amortised (i.e.
depreciated) as long as it has value (subject to the statutory
provisions) requires to be considered. If the expenditure does lead to
creation of an asset but of a limited or short life, it has to be
treated as a liability and not as a fixed asset. The said expenditure
cannot be valued for price for future financial years
2.
M/s Maharashtra Housing & Area Development Authority V. Addl.
DIT(E) I (1), Stay Application No. 293/Mum/2013, Date of Order :
25.11.2013, ITAT - Mumbai
Whether
the action of assessing officer of recovering outstanding taxes without
affording reasonable time to take remedial steps is a misuse of powers
and a gross violation of the directions laid down by the Courts .
Held Yes.
In
the matter under consideration, the assessee received the order of the
CIT(A) on 16.11.2013. It filed an appeal before the Tribunal on
18.11.2013 which was the next working day. The assessee also filed an
application before the Tribunal requesting stay of demand. The said
application was fixed for hearing on 22.11.2013. However, the AO,
attached the assessee’s bank account u/s 226(3) on 18.11.2013 and
withdrew Rs. 159.84 crore. The assessee argued before the Tribunal that
the coercive action of the AO was wrong because (i) the AO had taken
coercive action before the expiry of time of filing the appeal against
the order of the CIT(A), (ii) the action was taken even prior to the
disposal of the stay application by the Tribunal and (iii) no prior
notice was given to the assessee before taking the recovery action u/s
226(3). HELD by the Tribunal:
The
action of the AO in recovering the outstanding without affording the
assessee minimum reasonable time to take remedial steps is a misuse of
powers and a gross violation of the directions laid down by the Courts
as well as the basic rule of law and principles of natural justice.
Accordingly, we direct the Revenue to refund the entire amount of Rs.
159.84 crore to the assessee within 10 days from the receipt of this
order.
|
New User? 
Subscribe Now