RUCHI INFOTECH LTD , INDORE, INDORE V. DCIT CC-40, MUMBAI

ITA 3976/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7367 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 24-06-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: T T JACOB
• Assessee Lawyers: GANESH JAIN
• Keywords: Capital expenditure; Set aside
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'D' BENCH, MUMBAI BEFORE SHRI R.K. GUPTA, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. 3976/MUM/2009 (ASSESSMENT YEAR: 2007-08) M/S. RUCHI INFOTECH LTD. DCIT, CENTRAL CIRCLE 40 301, ROYAL ESTATE, 9/2, SOUTH MUMBAI TUKOGANJ, INDORE 452001 VS. PAN - AAACR 7201 D APPELLANT RESPONDENT APPELLANT BY: SHRI GANESH JAIN RESPONDENT BY: SHRI T.T. JACOB O R D E R PER B. RAMAKOTAIAH, A.M. THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF THE CIT(A)- CENTRAL VII DATED 22.04.2009. 2. THE ASSESSEE HAS RAISED THE FOLLOWING 3 GROUNDS, WH ICH ARE MATERIAL FOR CONSIDERATION: - 1. THAT THE LEANED ASSESSING OFFICER COMPLETED TH E ASSESSMENT ON A TOTAL INCOME OF RS.1,30,62,843/- AS AGAINST THE RET URNED INCOME OF RS.82,44,876/- AND THUS MAKING THE ADDITION OF RS.4 8,17,967/- IS QUITE ILLEGAL. 2. THAT ON THE FACTS THE LEARNED CIT(A) HAS NOT CON SIDERED SOFTWARE DEVELOPMENT EXPENSES REVENUE NATURE AND TREATED AS A CAPITAL EXPENDITURE. 3. THAT THE LEARNED CIT(A) HAS DISALLOWED EXPENSES RS.57967/- U/S 14A RULE 8-D OF THE ACT. GROUND NOS. 4 TO 6 ARE GENERAL IN NATURE AND NEED N OT TO BE ADJUDICATED. 3. WHEN THE CASE WAS POSTED FOR HEARING THE ASSESSEE VIDE LETTER DATED 03.03.2010 HAD INFORMED THAT THE APPEAL FOR A.Y. 20 06-07 HAS ALREADY BEEN DECIDED VIDE ORDER DATED 06.08.2009 AND REQUESTED T HIS APPEAL MAY KINDLY BE DECIDED ON THE SAME LINES AND OBLIGE. CONSIDERIN G THE WRITTEN REQUEST OF THE ASSESSEE THE APPEAL IS DECIDED AS UNDER. ITA NO. 3976/MUM/2009 M/S. RUCHI INFOTECH LTD. 2 4. WITH REFERENCE TO GROUND NOS. 1 & 2 THE ITAT HAS SE T ASIDE THE ISSUE BACK TO THE A.O. KEEPING IN LINE THAT THE DECISION OF THE SPECIAL BENCH OF ITAT AT DELHI IN THE CASE OF AMWAY INDIA ENTERPRISE VS. CIT (DEL) 111 ITD 112 WHEREIN CERTAIN GUIDELINES HAVE BEEN LAID DOWN TO A SCERTAIN THE EXACT NATURE OF SOFTWARE EXPENSES. IN LINE WITH THE DECISION IN ITA NO. 4611/MUM/2008 FOR A.Y. 2006-07 THE ISSUE IN THIS YEAR ALSO IS SET ASIDE TO THE FILE OF THE A.O. WITH A DIRECTION TO DECIDE THE SAME AFRESH IN THE L IGHT OF THE AFORESAID GUIDELINES LAID DOWN BY THE SPECIAL BENCH OF ITAT A ND ALSO THE DECISION OF THE A.O. IN A.Y. 2006-07 CONSEQUENT TO THE ABOVE ORDER OF THE ITAT. ACCORDINGLY GROUND NOS. 1 & 2 ARE CONSIDERED ALLOWED FOR STATIS TICAL PURPOSES. 5. GROUND NO. 3 IS WITH REFERENCE TO DISALLOWANCE OF E XPENDITURE UNDER SECTION 14A AND RULE 8-D OF IT RULES. WITH REFERENC E TO THIS GROUND THE ASSESSEE HAS NOT MADE ANY SUBMISSIONS. IN VIEW OF T HE SPECIAL PROVISIONS OF SECTION 14A AND RULE 8-D, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A) AND SINCE THE ASSESSEE HAS NOT MADE ANY SUBMISSION, WE ARE OF THE VIEW THAT THE ASSESSEE IS NOT INTERESTED IN PROSECUTING THIS GROUND. ACCORDINGLY THIS GROUND IS REJECTED. 6. IN THE RESULT, APPEAL IS CONSIDERED PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH MARCH 2010. SD/- SD/- (R.K. GUPTA) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 18 TH MARCH 2010 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) CENTRAL VII, MUMBAI 4. THE CIT CENTRAL IV, MUMBAI CITY 5. THE DR, D BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.