CIT vs. SMS DEMAG PVT LTD

IN THE HIGH COURT OF DELHI AT NEW DELHI 42 ITA 1075/2010 . . . CIT ..... Appellant Through Ms. Suruchi Aggarwal, Adv. versus . SMS DEMAG PVT LTD ..... Respondent Through None. CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE MANMOHAN . O R D E R 05.08.2010 . Heard Ms. Suruchi Aggarwal, learned counsel for the revenue. The present appeal preferred under Section 260A of the Income Tax Act, 1961 is admitted on the following substantial questions of law:- 1. Whether the Income Tax Appellate Tribunal could have held that the maintenance charges for software (SAP) cannot be treated either as royalty/fees for technical services in view of the fact that a plain reading of Section 40(a) (i) shows that any interest, royalty fee for technical services or sum chargeable under this Act, which is payable outside India or inside India to a non-resident not being a company or to a foreign company on which tax is deductible at source and such tax has not been deducted or, after deduction, has not been paid during the previous year or in the subsequent before the expiry of time, shall not be allowed, while computing the income chargeable under the head ?profits and gains of business or profession?? . 2. Whether the Income Tax Appellate Tribunal could have held that the payment for purchase of SAP software cannot be charged to tax . ITA 1075/2010 page 1 of 2 in India as interest or royalty or fee for technical services, as the assessee has not submitted anything to establish that the said payment is not in the nature of interest/royalty/fees for technical services? . 3. Whether the Income Tax Appellate Tribunal could have allowed depreciation as payment incurred towards installation of a software named ?SAP?, being in the nature of royalty/fees for technical services/interest cannot be capitalized? . 4. Whether the Income Tax Appellate Tribunal has erred in holding that provision of section 40(a)(i) are not applicable for claim for deduction under Section 32 of the Act, in order to delete disallowance of 50% of depreciation? . Issue notice. Filing of paper book stands dispensed with. . . CHIEF JUSTICE . . . MANMOHAN, J AUGUST 05, 2010 . . vk . . . . . . . . . . . ITA 1075/2010 page 2 of 2 .