Case Law Details
UKN Properties Pvt. Ltd. Vs DCIT (ITAT Banglore)
Since the transactions of purchase of software has been completed prior to rendering of decision by Hon’ble Karnataka High Court and since there were decisions which have held that TDS is not required to be made out of payment made for software purchases, following the above said decision we hold that the TDS liability cannot be fastened upon the assessee retrospectively and accordingly disallowance u/s 40(a)(i) is not called for even if the software purchases is treated as revenue expenditure. Accordingly, we are of the view that there is no reason to treat the cost of software capitalized by the assessee as revenue expenditure. Accordingly we set aside the order passed by Ld. CIT(A) and direct the AO to treat the cost of software as capital expenditure and delete the disallowance made on this issue.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
The appeal filed by the assessee is directed against the order dated 31.8.2016 passed by Ld. CIT(A)-7, Bengaluru and it relates to the assessment year 2011-12.
2. The grounds urged by the assessee give rise to the following issues:-
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