SWARO vs. KI INDIA PVT. LTD.,NEW DELHIVS.ADDL. CIT, SPECIAL RANGE- 8, NEW DELHI

These are the 3 appeals filed by the assessee on the common issue whether the expenditure incurred on software and Electronic data Processing charges [EDP] services are capital expenditure or revenue expenditure for assessment year 2012 – 13 to assessment year 2014 – 15. The assessee has filed an application on 19/08/2019 stating that all these 3 appeals are having only common, interrelated and covered issue by the appellant in its own case and therefore they should be consolidated and fixed for hearing at an early date.

During the course of hearing of the petition of the assessee for early hearing the learned counsel for the assessee submitted that identical issue is covered in favour of the assessee by the order of the coordinate bench for assessment year 2011 – 12, 2007 – 08 to 2009 – 10 dated 25/7/2019 wherein the issue is allowed holding that such expenditure of software and EDP services are revenue in nature. Therefore, these impugned appeal is may be consolidated and heard at an early date. Page | 1

With the consent of the parties, as no other issue is involved in these appeals, at the time of hearing the application of the assessee for consolidation and early fixation itself , all these appeals were taken for hearing itself.

For assessment year 2012 – 13 assessee filed its return of income on 30/11/2012 declaring income of INR 7 462300/–. Assessment u/s 143 (3) of the act was passed on 14/3/2016 at INR 85762426/–. The assessee claimed an expenditure of INR 15931717/– on account of software and EDP charges as revenue expenditure which was held by the learned assessing officer as capital expenditure. He allowed depreciation at the rate of 60% thereon and made the net addition of INR 6 372687/–. On appeal before the learned CIT – A action of the learned assessing officer was confirmed on account of the order of the learned CIT – A in assessee’s own case in earlier years confirming action of the learned assessing officer. Thus the assessee is in appeal. 5. For assessment year 2013 – 14 the assessee filed its return of income on 29/11/2013 declaring a loss of Rs. 2828080/–. The assessment u/s 143 (3) of the income tax act was passed on 18/3/2016 wherein software and EDP charges of INR 18471175 were claimed as revenue expenditure by the assessee but the assessing officer considered same as capital expenditure and allowed 60% depreciation thereon. After allowing depreciation Rs. 7388470/– were added to the total income of the assessee. On appeal before the learned CIT – A following the order of the learned CIT – A in assessee’s own case for assessment year 2007 – 08, 2008 – 09 and 2009 – 10 held that same are capital in nature. Thus the assessee is in appeal. 6. For assessment year 2014 – 15 assessee filed its return of income on 29/11/2014 declaring an income of INR 6 9705090/–. Assessment u/s 143 (3) of the act was passed wherein the total income of the assessee was determined at INR 7 9438111/–. During the year the assessee has incurred an expenditure of Rs. 24332553/– on account of EDP charges which was claimed by the assessee as revenue expenditure but the learned assessing officer held it to be capital expenditure, allowed Page | 2 depreciation at the rate of 60% and made the net addition of INR 9 733021/–. On appeal before the learned CIT – A following the order of the learned CIT – A in assessee’s own case for earlier years confirmed the action of the learned assessing officer. Thus the assessee is in appeal.