Indo British Garments P.Ltd, New Delhi V. ACIT, Circle-12(1), New Delhi

ITA 2550/DEL/2018

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 8590 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 30-08-2022
• Assessment Year: misc
• Appeal Filed On: 11-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘C’, NEW DELHI Before Sh. N. K. Choudhary, Judicial Member Dr. B. R. R. Kumar, Accountant Member ITA No. 2550/Del/2018 : Asstt. Year : 2013-14 ITA No. 4393/Del/2018 : Asstt. Year : 2014-15 Indo British Garments P. Ltd., C-16, Community Centre, Janakpuri, Behind Janak Cinema, New Delhi-110058 Vs ACIT, Circle-12(1), New Delhi-110002 (APPELLANT) (RESPONDENT) PAN No. AAACI7874B Assessee by : Sh. Kamal Bansal, CA Revenue by : Sh. Ravi Kant Choudhary, Sr. DR Date of Hearing: 31.08.2022 Date of Pronouncement: 14.11.2022 ORDER Per Dr. B. R. R. Kumar, Accountant Member: T hes e ap pe a ls ha v e b e e n fi le d by the as se s s e e ag ain s t the o r d er o f ld . C IT (A ) -4 , Ne w De lh i d ate d 17 .0 1 .2 01 8 and the o r d er o f ld . C IT ( A) - 22 , Ne w De l hi d ate d 2 8 .0 2. 20 1 8. 2 . Si n ce , the is s ue i nv o lv ed in b o th t he ap pe al s are ide nt ic a l, the y w e r e he ar d to g e t he r and b e ing ad j ud i ca te d b y a c om m o n o r d er . Disallowance of Expenditure: 3 . T he so l it ar y i s s u e i n t h is app e al is t ha t t he asse s se e ha s cap i ta l i ze d the s aid e x p e ns e s i n the ir f i na nc ia l s tate me n ts a nd tr e a te d the s am e as r o y alt y and cla i m ed the sa m e as r e v e nue e x p e nd itur e in t he c om p ut at io n o f i nc o me . T he AO held t ha t si nce t he a sse s se e i ts e lf ha s c api t al i ze d t he s a id e x pe nse s i n i ts ITA Nos. 2550 & 4393/Del/2018 Indo British Garments Pvt. Ltd. 2 fi na nc i al s t ate m e nt s and di s a llo w e d re v e nue e x pe nd iture cl ai m e d. T he fa c ts r e v e a led th a t the asse s se e e nt ere d int o a so f twar e l ice nse agr e e m e nt w i t h W o r ld F as h io n Ex change Ind ia P v t. L t d. f o r E RP so f t war e n ame d WF X - ER P - II a nd c lai m e d tha t si nce t he p ay m e n t w a s f o r t he u se o f so f t war e , t he sam e s ho u ld b e tr e ate d a s r o y alty a nd al lo w e d as r e ve nue e x p e ndit ur e . We fi nd t ha t the s am e has b e e n cap i ta li ze d i n t he b o o ks o f acc o unt s. S i nce , the s a me h as be e n cap i ta l ize d , w e co n fir m the o r d er o f the r e v e nue aut ho r it ie s and as the p ay m e nt mad e i s fo r o bta i n ing co m pu te r so ft w ar e , w e ho ld t ha t th e as se ss e e is e lig ib le to c lai m d e p re c iat io n a s p er the pr o v is i o ns o f Inco me T ax A c t . 4 . In t he r e s ul t , the ap pe al s o f t he a sse s se e ar e al lo w e d . O r de r P r ono u nc e d i n the O p en Co ur t o n 1 4/ 1 1/ 2 02 2 . Sd / - Sd / - (N. K. Choudhary) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 14/11/2022 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR