Case Law Details
Ms ILink Multitech Solutions Pvt. Vs DCIT (ITAT Cheenai)
It is not in dispute that the assessee purchased MS Office software and used the same in its business. By purchasing MS Office software , the assessee has not become owner of the software. The ownership of MS Office software remained with Microsoft company. The assessee has to necessarily renew the licence periodically for using the same in the business. Merely because the assessee is using MS Office software as operating software in its system, it does not mean that MS Office software is the capital asset in the hands of the assessee-company. All assets / licence for use of software cannot be construed as capital asset merely because it gives an enduring benefit. By using MS Office software in the business of the assessee, the assessee gets enduring benefit in the course of earning of profit. So long as the assessee is a licensee, the ownership of MS Office software remains with Microsoft company. This Tribunal is of the considered opinion that the expenditure cannot be construed to be capital expenditure. The judgment of Madras High Court in Southern Roadways Ltd. (supra) in respect of software package is squarely applicable to the facts of the case. Therefore, the CIT(Appeals) is not justified in distinguishing the judgment of Madras High Court.
FULL TEXT OF THE ITAT JUDGEMENT
All the appeals of the assessee are directed against the respective orders of the Commissioner of Income Tax (Appeals) -6, Chennai, dated 26.04.2017 and pertain to assessment years 2012- 13, 2013-14 and 2014-15. Since common issue arises for consideration in all these appeals, we heard these appeals together and disposing of the same by this common order.
2. The common issue arises for consideration for all the three assessment years is with regard to expenditure incurred by the assessee towards licence fee paid for using MS Office software.
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