Disallowance u/s 14A - Held that - The Assessing Officer while making the disallowance under section 14A has worked out the disallowance as per rule 8D of the Income-tax Rules, 1962 which according to the decision in the case of Godrej and Boyce Mfg. Co. Ltd. 2010 (8) TMI 77 - BOMBAY HIGH COURT is not applicable for the assessment year 2007-08. However, before the learned Commissioner of Income-tax (Appeals) the assessee has filed working of disallowance under section 14A amounting to Rs. 31,69,778. The learned Commissioner of Income-tax (Appeals) in violation to rule 46A of the Income-tax Rules, 1962 and without giving any finding on the examination of the working given by the assessee has accepted the working submitted by the assessee. Therefore, in the interest of justice, it is fair and reasonable that the matter should go back to the file of the Assessing Officer and accordingly we set aside the order passed by the Revenue authorities on this account and restore the same to the file of the Assessing Officer to examine the same afresh - Decided in favour of assessee. Disallowance of service tax under section 43B of the Act. - Held that - as per the law prevailing during the previous year, the liability to pay the same arises only on receipt by the assessee. Since the liability to pay service tax does not exist in the present case, the service tax cannot be said to be payable and therefore provisions of section 43B of the Act could not also be invoked - Following the decision in Chowringhee Sales Bureau P. Ltd. v. CIT 1974 (6) TMI 5 - CALCUTTA High Court , Asst. CIT v. Real Image Media Technologies P. Ltd. 2007 (12) TMI 263 - ITAT MADRAS-C decided in favor of assessee. Capital expenditure or revenue expenditure - Held that - In the absence of any contrary material placed on record by the Revenue against the above factual matrix, we are of the view that the Assessing Officer was not justified in treating the maintenance of software expenses as capital expenditure and the learned Commissioner of Income- tax (Appeals) has rightly deleted same. However, it has been agreed by learned counsel for the assessee that if the said expenditure is treated as revenue expenditure, the depreciation is not allowable and he agreed for the disallowance of the same and accordingly to this extent the order passed by the learned Commissioner of Income-tax (Appeals) is modified............................... Income Tax - Case Law
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