AXA Business Services Pvt. Ltd. Vs DCIT (ITAT Bangalore)
We have considered the rival submissions. We find that despite all the details having been filed by the assessee before the CIT(Appeals), the CIT(Appeals) has not considered those submissions with regard to the sum disallowed by the AO, except the sum of Rs.81,52,209 which was incurred towards Microsoft EAS licence renewal of AXABS software. The claim made by the assessee in respect of remaining items of expenditure was that they were of similar nature in the form of licence and support services. This submission has not been dealt with by the CIT(Appeals). In these circumstances, we deem it fit and appropriate to set aside the order of CIT(Appeals) on this issue and remand the same to the ld. CIT(Appeals) for passing a speaking order on the claim of assessee for deduction in the light of evidence filed by assessee. The CIT(Appeals) will afford opportunity of being heard to the assessee.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal by the assessee is against the order dated 17.11.2017 of the CIT(Appeals)-1, Bengaluru relating to assessment year 2013-14.
2. The only issue that arises for consideration in this appeal is as to, whether the CIT(Appeals) was justified in sustaining disallowance of Rs.7,21,181 for software expenses claimed as revenue expenditure and deductible while computing business income of the assessee.
3. The assessee is a company engaged in the business of providing ITeS, BPO services, trading etc. In the course of assessment proceedings, the AO noticed that the assessee had debited a sum of Rs.2,18,19,129 towards software expenses. The AO called upon the assessee to show cause as to why the aforesaid expenses should not be treated as capital expenditure and disallowed and added to the total income of assessee. The assessee claimed that the expenses were revenue in nature and also gave a break-up of the software expenses which were claimed as deduction:-
