ACIT, New Delhi V. M/s. Oriental Bank of Commerce, Gurgaon

ITA 5846/DEL/2016

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1663 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 15-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAMITA M BISWAS
• Keywords: Depreciation; Question of law
• Section: 271(1)(c); 13

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI E BEN CH, NEW DELHI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND MS. SUCHITRA KAMBLE, JUDICIAL M EMBER ITA NO. 5845/DEL/2016 [A.Y 2008-09] ITA NO. 5846/DEL/2016 [A.Y 2009-10] THE A.C.I.T. VS. ORIENTAL BANK OF CO MMERCE CIRCLE 19(1) CENTRAL ACCOUNT OFFICE NEW DELHI. 2 ND FLOOR, PLOT NO. 5 SECTOR 32, INSTITUTIONAL AREA GURGAON, HARYANA PAN: AAACO 0191 M (APPLICANT) ( RESPONDENT) ASSESSEE BY : SHRI K.V.S.R. KRISHNA, CA DEPARTMENT BY : MS. PRAMITA M. BI SWAS, CIT-DR DATE OF HEARING : 10.12.2019 DATE OF PRONOUNCEMENT : 11.12.2019 ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER, THE ABOVE TWO SEPARATE APPEALS BY THE REVENUE ARE P REFERRED AGAINST THE COMMON ORDER OF THE COMMISSIONER OF INC OME TAX [APPEALS] - 36, NEW DELHI DATED 06.09.2016 PERTAI NING TO ASSESSMENT 2 YEARS 2008-09 AND 2009-10. IN BOTH THE APPEALS, TH E REVENUE HAS CHALLENGED THE ORDER OF THE FIRST APPELLATE AUTHORI TY WHO DELETED THE PENALTY LEVIED U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT'], THOUGH THE QUANTUM DIFFE RS. 2. THE ADDITION/DISALLOWANCE ON WHICH THE ASSESSING OFFICER HAS PROCEEDED TO LEVY PENALTY U/S 271(1)(C) OF THE ACT RELATES TO THE CLAIM OF DEPRECATION ON FALL IN VALUE OF INVESTMENT AND C LAIM OF DEPRECIATION ON SOFTWARE. 3. AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASSE SSEE BROUGHT TO OUR NOTICE THAT THE QUANTUM ADDITION IN RESPECT OF CLAIM OF DEPRECIATION ON FALL IN VALUE OF INVESTMENT HAS BEE N DELETED BY THE TRIBUNAL AND CLAIM OF EXPENDITURE ON SOFTWARE HAS B EEN ALLOWED BY THE HON'BLE HIGH COURT OF DELHI. THE LD. COUNSEL FOR T HE ASSESSEE FURNISHED COPIES OF ORDERS OF THE CO-ORDINATE BENCH AND THE H ON'BLE HIGH COURT OF DELHI. 4. THE LD. DR FAIRLY CONCEDED. 3 5. WE HAVE GIVEN THOUGHTFUL CONSIDERATION TO THE OR DERS OF THE AUTHORITIES BELOW AND HAVE CAREFULLY PERUSED THE OR DERS OF THE CO- ORDINATE BENCH AND THAT OF THE HON'BLE HIGH COURT O F DELHI. WE FIND FORCE IN THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE. 6. IN SO FAR AS THE FIRST ISSUE IS CONCERNED, THE T RIBUNAL IN QUANTUM APPEAL IN ITA NOS. 6795 AND 6796/DEL/2013 HAS HELD AS UNDER: 4. WE HAVE HEARD THE SUBMISSIONS OF BOTH THE PARTI ES AND HAVE GONE THROUGH THE ENTIRE MATERIAL AVAILABLE ON RECORD. A PERUSAL OF THE IMPUGNED ORDER REVEALS THAT WHILE DE CIDING THIS ISSUE AGAINST THE ASSESSEE, THE LD. CIT(A) HAS RELI ED ON EARLIER ORDER OF FIRST APPELLATE AUTHORITY IN APPEAL OF THE ASSESSEE FOR A.Y. 2007-08. HOWEVER, THE SAID ORDER OF FIRST APPELLATE AUTHORITY HAS BEEN 7 ITA NO.6795 & 6796/D/13 AND 24 2 & 243/D/14 REVERSED BY THE TRIBUNAL ON THIS ISSUE IN ITA NO. 1937/DEL./2011 (2007-08) VIDE ORDER DATED 04.11.201 5, WHEREIN THE COORDINATE BENCH HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AS UNDER : 13. WE HAVE CAREFULLY C ONSIDERED THE RIVAL CONTENTIONS. DURING THE YEAR, ASSESSEE HA S DEBITED THE LOSS OF RS. 205.43 CRORES ARISING OF ON ACCOUNT OF TRANSFER OF SECURITIES OF RS. 1664.32 CRORES FROM AVAILABLE FOR SALE CATEGORY TO HELD TO MATURITY CATEGORY I N TERMS OF RESOLUTION OF THE BOARD OF DIRECTORS OF THE APPELLA NT. CLAIM 4 HAS ARISEN BECAUSE OF THE CIRCULAR ISSUED BY RESERV E BANK OF INDIA ON PRUDENTIAL NORMS FOR CLASSIFICATION, VALUA TION AND OPERATION OF INVESTMENT PORTFOLIO BANK DATED 1ST JU LY, 2006. ACCORDING TO THAT CIRCULAR THE BANKS ARE ALLOWED TO TRANSFER SECURITIES FROM ONE CATEGORY TO ANOTHER CATEGORY ON CE EVERY YEAR AT THE LEAST VALUE OF FOLLOWING :- (A) ACQUISI TION COST (B) BOOK VALUE AND (C) MARKET VALUE. IT IS FURTHER PROV IDED THAT IF BECAUSE OF SUCH TRANSFER ANY DEPRECIATION ARISES, I T SHOULD BE FULLY PROVIDED FOR. THE CLAIM OF THE ASSESSEE IS TH AT THIS LOSS SHOULD BE ALLOWED AS DEDUCTION BECAUSE OF TRANSFER OF SECURITIES FROM ONE CATEGORY TO ANOTHER CATEGORY. T HEREFORE, THE ISSUE IN APPEAL IS THAT WHETHER A BANKING COMPA NY CLAIMS THE LOSS, BASED ON CIRCULARS AND INSTRUCTIONS OF RE SERVE BANK OF INDIA, IS ALLOWABLE BECAUSE OF TRANSFER OF SECUR ITY FROM CATEGORY OF AVAILABLE FOR SALE TO HELD TO MATURI TY. THIS ISSUE NOW NO LONGER SURVIVES IN VIEW OF TWO DECISIO NS OF HONBLE KARNATAKA HIGH COURT IN CASE OF KARNATAKA B ANK LTD. VS. ASSISTANT COMMISSIONER OF INCOME TAX 356 ITR 54 9 AND CIT VS. BANK OF BARODA 262 ITR 334 AND A DECISION O F HONOURABLE BOMBAY HIGH COURT IN CASE OF CIT VS. HDF C BANK LTD. REPORTED AT 368 ITR 377 CONSIDERING DECISION O F HONOURABLE SUPREME COURT IN CASE OF UNITED COMMERCI AL BANK V CIT 240 ITR 355 AND SOUTHERN TECHNOLOGIES LIMITED V JT CIT 320 ITR 577, WHEREIN HONBLE HIGH COURT HAS HEL D AS UNDER:- 9. IN THE PRESENT CASE, WE FIND THAT THE F ACTS AND ISSUES THAT ARE COVERED BY THE AFORESAID JUDGMENT S QUARELY 5 APPLY TO THE FACTS AND ISSUES RAISED IN THE PRESENT APPEAL. NOT ONLY ARE WE IN FULL AGREEMENT WITH THE JUDGMENT OF THIS COURT IN THE CASE OF BANK OF BARODA (SUPRA) BUT WE ARE BOUND BY THE SAME. WE THEREFORE RESPECTFULLY FOLLOW THE R ATIO LAID DOWN IN THE SAID JUDGMENT. 10. WE FIND THAT EVEN T HE JUDGMENT OF THE KARNATAKA HIGH COURT IN THE CASE OF KARNATAKA BANK LTD. (SUPRA), RELIANCE ON WHICH WAS PLACED BY MR MISTRY, SQUARELY COVERS THE ISSUE RAISED IN THIS APPEAL. THE FACTS IN THE CASE BEFORE THE KARNATAKA HIGH COU RT WERE THAT THE ASSESSEE WAS HOLDING SECURITIES IN DIFFERE NT CATEGORIES AS MANDATED BY THE RBI MASTER CIRCULAR D ATED 1ST SEPTEMBER 2003. THE ASSESSEE TREATED SUCH SECURITIE S AS STOCK-IN-TRADE AND 8 ITA NO.6795 & 6796/D/13 AND 24 2 & 243/D/14 CLAIMED DEPRECIATION ON THE BOOK VALUE AFT ER VALUING THE SECURITIES AT COST OR MARKET VALUE WHICHEVER WA S LOWER. THE REVENUE REFUSED TO ACCEPT THE ASSESSEE'S PLEA F OR THE DEDUCTION AND DISALLOWED THE SAME AND ADDED BACK TO THE TOTAL INCOME THE SAID AMOUNT. AGGRIEVED BY THE SAID ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (AP PEALS). THE SAME WAS DISMISSED UPHOLDING THE CONTENTION OF THE ASSESSING AUTHORITY. AGGRIEVED THEREBY, THE ASSESSE E PREFERRED AN APPEAL TO THE TRIBUNAL. THE TRIBUNAL I NTER ALIA HELD THAT SINCE THE SECURITIES ON WHICH THE DEPRECI ATION HAD BEEN CLAIMED ON THE EARLIER YEARS HAD NOT BEEN IDEN TIFIED, THE ISSUE WAS RESTORED TO THE FILE OF THE ASSESSING OFF ICER FOR CONSIDERATION AFRESH AND PARTLY ALLOWED THE APPEAL. BEING 6 AGGRIEVED BY THE SAID ORDER, KARNATAKA BANK LTD. PR EFERRED AN APPEAL TO THE KARNATAKA HIGH COURT UNDER SECTION 26 0A OF THE ACT. AFTER DISCUSSING VARIOUS JUDGMENTS OF THE SUPREME COURT, THE KARNATAKA HIGH COURT HELD AS UNDER : 'F ROM THE AFORESAID JUDGMENTS OF THE APEX COURT, NOW IT IS CL EAR THAT A METHOD OF ACCOUNTING ADOPTED BY THE TAXPAYER CONSIS TENTLY AND REGULARLY CANNOT BE DISCARDED BY THE DEPARTMENT AL AUTHORITIES ON THE VIEW THAT HE SHOULD HAVE ADOPTED A DIFFERENT METHOD OF KEEPING THE ACCOUNTS OR ON VALU ATION. FINANCIAL INSTITUTIONS LIKE BANK, ARE EXPECTED TO M AINTAIN ACCOUNTS IN TERMS OF THE RBI ACT AND ITS REGULATION S. THE FORM IN WHICH, ACCOUNTS HAVE TO BE MAINTAINED IS PR ESCRIBED UNDER THE AFORESAID LEGISLATION. THEREFORE, THE ACC OUNT HAD TO BE IN CONFORMITY WITH THE SAID REQUIREMENTS. THE RB I ACT OR THE COMPANIES ACT DO NOT DEAL WITH THE PERMISSIBLE DEDUCTIONS OR EXCLUSION UNDER THE INCOME TAX ACT. F OR THE PURPOSE OF THE INCOME TAX ACT, IF THE ASSESSEE HAS CONSISTENTLY BEEN TREATING THE VALUE OF INVESTMENT FOR MORE THAN TWO DECADES THE INVESTMENTS AS STOCK-IN-TRADE AND CLAIMED DEPRECIATION, IT IS NOT OPEN TO THE AUTHORI TIES TO DISALLOW THE SAID DEPRECIATION ON THE GROUND THAT I N THE BALANCE-SHEET IT IS SHOWN AS INVESTMENT IN TERMS OF THE RBI REGULATIONS. THE RBI REGULATIONS, THE COMPANIES ACT AND THE INCOME TAX ACT OPERATE ALTOGETHER IN DIFFERENT FIEL DS. THE QUESTION WHETHER THE ASSESSEE IS ENTITLED TO PARTIC ULAR DEDUCTION OR NOT WILL DEPEND UPON THE PROVISION OF LAW RELATING 7 THERETO AND NOT THE WAY, IN WHICH THE ENTRIES ARE M ADE IN THE BOOKS OF ACCOUNT. IT IS NOT DECISIVE OR CONCLUSIVE IN THE MATTER. FOR THE PURPOSE OF THE INCOME TAX ACT WHICH EVER METHOD IS ADOPTED BY THE ASSESSEE, A TRUE PICTURE O F THE PROFITS AND GAINS, I.E. REAL INCOME IS TO BE DISCLO SED. FOR DETERMINING THE REAL INCOME, THE ENTRIES IN THE BAL ANCESHEET IS REQUIRED TO BE MAINTAINED IN THE STATUTORY FORM MAY NOT BE DECISIVE OR CONCLUSIVE. IT IS OPEN TO THE INCOME TA X OFFICER AS WELL AS THE ASSESSEE TO POINT OUT TRUE AND PROPE R INCOME WHILE SUBMITTING THE INCOME TAX RETURNS. EVEN IF TH E ASSESSEE UNDER SOME MISREPRESENTATION OR MISTAKE FAILS TO MA KE AN ENTRY IN THE BOOKS OF ACCOUNT, ALTHOUGH UNDER LAW, A DEDUCTION MUST BE ALLOWED BY THE INCOME TAX OFFICER, THE ASSE SSEE WILL NOT LOSE ANY RIGHT ON CLAIMING OR WILL BE DEBARRED FROM BEING ALLOWED THE DEDUCTION. THEREFORE, THE APPROACH OF T HE AUTHORITIES IN THIS REGARD IS CONTRARY TO THE WELL SETTLED LEGAL POSITION AS DECLARED BY THE APEX COURT. 9 ITA NO.67 95 & 6796/D/13 AND 242 & 243/D/14 IN THE INSTANT CASE, T HE ASSESSEE HAS MAINTAINED THE ACCOUNTS IN TERMS OF TH E RBI REGULATIONS AND HE HAS SHOWN IT AS INVESTMENT. BUT CONSISTENTLY FOR MORE THAN TWO DECADES IT HAS BEEN SHOWN AS STOCK-IN-TRADE AND DEPRECIATION IS CLAIMED AND ALLO WED. THEREFORE, NOTWITHSTANDING THAT IN THE BALANCE-SHEE T , IT IS SHOWN AS INVESTMENT, FOR THE PURPOSE OF INCOME TAX ACT, IT IS SHOWN AS STOCK-IN-TRADE. THEREFORE, THE VALUE OF TH E STOCKS BEING CLOSELY CONNECTED WITH THE STOCK MARKET, AT T HE END OF 8 THE FINANCIAL YEAR, WHILE VALUING THE ASSETS, NECES SARILY THE BANK HAS TO TAKE INTO CONSIDERATION THE MARKET VALU E OF THE SHARES. IF THE MARKET VALUE IS LESS THAN THE COST P RICE, IN LAW, THEY ARE ENTITLED TO DEDUCTIONS AND IT CANNOT BE DE NIED BY THE AUTHORITIES UNDER THE PRETEXT THAT IT IS SHOWN AS I NVESTMENT IN THE BALANCE-SHEET.' (EMPHASIS SUPPLIED) 11. WE T HEREFORE FIND THAT THE ISSUE RAISED IN THIS APPEAL IS ALSO S QUARELY COVERED BY THE JUDGMENT OF THE KARNATAKA HIGH COURT IN THE CASE OF KARNATAKA BANK LTD. (SUPRA). 12. IN VIEW TH EREOF, WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE ITAT. THE PRESENT APPEAL DOES NOT RAISE ANY SUBSTANTIAL QUEST ION OF LAW AS PROJECTED BY THE LEARNED COUNSEL APPEARING FOR T HE APPELLANT. THE APPEAL IS THEREFORE DISMISSED. 14. THEREFORE, WE FIND THAT THE ISSUE RAISED IN THIS APPEAL SQUARE LY COVERED BY THE DECISION OF HONBLE KARNATAKA HIGH COURT AS WELL AS MUMBAI HIGH COURT IN FAVOUR OF ASSSESSEE. THEREFORE , RESPECTFULLY FOLLOWING THOSE JUDICIAL PRECEDENTS, W E REVERSE THE ORDER OF CIT (A) AND DELETE THE DISALLOWANCE OF RS. 205.43 CRORES ON ACCOUNT OF CLAIM OF LOSS OF TRANSF ER OF SECURITY FROM AVAILABLE FOR SALE CATEGORY TO HEL D TO MATURITY CATEGORY BY THE APPELLANT BANK IN ACCORDANCE WITH D IRECTION/ CIRCULAR OF RESERVE BANK OF INDIA. THIS DECISION H AS BEEN CONFIRMED BY THE HONBLE HIGH COURT IN APPEAL OF TH E REVENUE NO. 306/2016 VIDE ORDER DATED 11.05.2016 HOLDING AS UNDER : 3. THE ITAT FOUND THAT THE ASSESSEE HAS BEEN CONSI STENTLY REFLECTING THE INVESTMENT AS STOCK-IN-TRADE IN ITS BALANCE 9 SHEET. THE ITAT HAS NOTED THAT THE ASSESSEE HAD IN COMPLIANCE WITH THE DIRECTION OF THE RESERVE BANK O F INDIA (RBI) TRANSFERRED SLR SECURITIES APPRECIATING TO RS . 1664.32 CRORES FROM THE 'AVAILABLE FOR SALE1 CATEGORY TO TH E 'HELD TO MATURITY' CATEGORY DURING THE AY IN QUESTION. THIS RESULTED IN MARK TO MARKET DEVALUATION OF RS. 205.43 CRORES WHI CH WAS DEBITED TO THE P&L ACCOUNT, REGARDING MAINTAINING A MINIMUM AMOUNT OF STOCK AS RESERVE. THE AO DISALLOWED THIS BY TERMING IT AS A NOTIONAL AND NOT A REAL LOSS. THE I TAT DISAGREED AND REVERSED THE AO IN LIGHT OF THE LEGAL POSITION EXPLAINED IN THE DECISION OF THE HIGH COURT OF 10 I TA NO.6795 & 6796/D/13 AND 242 & 243/D/14 KARNATAKA IN KARNATAKA BANK LTD. V. ASSISTANT COMMISSIONER OF IN COME TAX [2013] 356 ITR 549 (KAR.) AND THE DECISIONS HIGH CO URT OF BOMBAY IN COMMISSIONER OF INCOME TAX V. BANK OF BAR ODA [2003] 262 ITR 334 (BOM) AND COMMISSIONER OF INCOME TAX V. HDFC BANK LTD. [2014] 368 ITR 377 (BOM). THE ITA T HAS NOTED THAT THE ABOVE DECISIONS REFERRED TO THE DECI SIONS OF THE SUPREME COURT IN UNITED COMMERCIAL BANK V. COMM ISSIONER OF INCOME TAX [1999] 240 ITR 355 (SC) AND SOUTHERN TECHNOLOGIES LTD V. THE JOINT COMMISSIONER OF INCOM E TAX [2010] 320 ITR 577 (SC). 4. HOWEVER, MR. SHIVPURI, LEARNED SENIOR STANDING COUNSEL APPEARING FOR THE REVENUE, SEEKS TO PLACE RELIANCE ON ANOTHER DECISION OF HIGH COURT OF KARNATAKA IN COMMISSIONER OF. INCOME TAX V. ING VYSYA BANK LT D. [2013] 356 ITR 532 (KAR.) WHERE, IN THE FACTS OF TH AT CASE IT 10 WAS HELD THAT WHERE THE ASSESSEE INVESTED IN SECURI TIES FOR THE PURPOSE OF COMPLYING WITH RBI INSTRUCTIONS, SUC H INVESTMENTS COULD NOT BE TERMED AS INVESTMENT IN TH E FORM OF SECURITY READY FOR SALE. THE COURT IS NOT PERSUADED TO CONCUR WITH THE VIEW EXPRESSED IN ING VYSYA BANK LTD. (SUP RA) WHICH APPEARS TO HAVE BEEN DECIDED IN THE PECULIAR FACTS OF THAT CASE. THE COURT PREFERS TO ADOPT THE REASONING IN THE DECISION THE KARNATAKA HIGH COURT IN KARNATAKA BANK LTD. (SUPRA) AND THE BOMBAY HIGH COURT IN HDFC BANK LTD. (SUPRA). THE COURT ACCORDINGLY DECLINES TO FRAME A- QUESTION ON THIS ISSUE. THEREFORE, RESPECTFULLY FOLLOWING THE ABOVE DECISIONS OF COORDINATE BENCH AND OF HONBLE JURISDICTIONAL H IGH COURT, WE DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE BY D ELETING THE ADDITIONS OF RS.209.99 CRORES AND RS.119.55 CRORES RESPECTIVELY FOR A.YRS. 2008-09 AND 2009-10. ACCORD INGLY, GROUNDS NOS. 1 TO 4 IN BOTH THE APPEALS OF THE ASSE SSEE ARE ALLOWED 7. IN SO FAR AS THE SECOND ISSUE IS CONCERNED, THO UGH THE TRIBUNAL HAS DISMISSED THE APPEAL OF THE ASSESSEE AND UPHELD THE DISALLOWANCE BY HOLDING AS UNDER: 8. WE HAVE HEARD THE SUBMISSIONS OF BOTH THE SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD AND WE FIN D THAT THE LD. CIT(A) HAS MADE AN ELABORATE DISCUSSION ON THIS ISSUE. THE 11 LD. AR HAD SUBMITTED THE DETAILS OF AMC CHARGES WHI CH HAS BEEN ALLOWED BY THE LD. CIT(A) AS REVENUE EXPENDITU RE, BUT IN CASE OF LICENSE FEE FOR ORACLE DATABASE, ANTIVIRUS SOFTWARE ETC., THE APPELLANT COULD NOT ESTABLISH THAT THE SA ME WERE FOR A PARTICULAR PERIOD. THE CASE LAWS RELIED UPON BY T HE APPELLANT HAS RIGHTLY BEEN DISTINGUISHED BY THE LD. CIT(A). W E, THEREFORE, FIND THAT THE LD. CIT(A) HAS PASSED A GO OD ORDER WHICH NEEDS NO 20 ITA NO.6795 & 6796/D/13 AND 242 & 243/D/14 INTERFERENCE ON THIS ISSUE. ACCORDINGLY, G ROUNDS NO. 7 IN BOTH THE APPEALS OF THE ASSESSEE ARE DISMISSED . 8. THE MATTER TRAVELLED UPTO THE HON'BLE HIGH COURT AND THE HON'BLE HIGH COURT, IN ITA NOS.129 OF 2018 AND 415 OF 2017 AND 56 OF 2018 HAS HELD AS UNDER: 7. THE MERE CIRCUMSTANCE THAT THE DEPRECIATION RAT E IS SPELT OUT IN THE SCHEDULE TO THE INCOME-TAX ACT IN OUR OPINION IS NOT CONCLUSIVE AS TO THE NATURE OF THE EXPENDITU RE AND WHETHER IT RESULTED AN ENDURING ADVANTAGE TO A PART ICULAR ASSESSEE. IT IS NOBODY'S CASE THAT ASSESSEE IS DEAL ING WITH COMPUTER SOFTWARES OR IS IN THE BUSINESS OF ANY RELATED SERVICES. RATHER IT USES SPECIFIC CUSTOMIZE D SOFTWARE, WHICH IS SPECIFIC TO ITS BANKING ACTIVITIES. BUT FO R THE USE OF SUCH SOFTWARE, THE NATURE OF EXPENDITURE OTHERWISE INCURRED FOR STREAMLINING ITS FUNCTIONS I.E. TOWARDS FEE PAY ABLE TO THE 12 CONSULTANTS FOR SYSTEMS AND EMPLOYMENT OF SPECIAL PROFESSIONALS TO CARRY ON THE TASKS THAT THE SOFTWA RE IN FACT PERFORMS, WOULD HAVE FALLEN UNDOUBTEDLY IN THE REVE NUE STREAM. TAKING THESE INTO ACCOUNT AND THE FURTHER CIRCUMSTANCE THAT THE SOFTWARE ITSELF WOULD HAVE RU N ITS COURSE OR LIFE SPAN AS IT WERE, GIVEN THAT THE EARL IER ASSESSMENT YEAR IN QUESTION IS 2008-09, WE ARE OF T HE OPINION THAT THE QUESTION OF LAW FRAMED IS TO BE ANSWERED I N FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. THE APPEALS A RE CONSEQUENTLY ALLOWED. NO ORDER AS TO COSTS. 9. AS THE FOUNDATION HAS BEEN REMOVED, THE SUPER ST RUCTURE MUST FALL. WE, THEREFORE, DECLINE TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). 10. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE IN ITA NOS. 5845 & 5846/DEL/2016 ARE DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 11.12. 2019. SD/- SD/- [ SUCHITRA KAMBLE ] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 11 TH DECEMBER, 2019 VL/ 13 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS /PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER