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Income Tax Appellate Tribunal, “A” BENCH : BANGALORE
Before: SHRI N.V. VASUDEVAN, VICE- & SHRI ARUN KUMAR GARODIA
O R D E R
Per Shri A.K. Garodia, Accountant Member
This appeal is filed by the revenue and the same is directed against the order of ld. CIT(A)-IV, Bangalore dated 11.03.2013 for Assessment Year 2005-06.
The grounds raised
by the revenue are as under. “1. The order of the Learned CIT (Appeals), in so far as it is prejudicial to the interest of revenue, is opposed to law and the facts and circumstances of the case.
2. The CIT(A) was not justified in deleting the disallowance made in respect of Product Development Expenditure of Rs.88,58,638/-
3. The CIT(A) ought to have appreciated that the expenses are capital in nature as the assessee company has developed intangible assets from which it derives revenue by lincensing of such intangible assets.
4. The CIT(A) was not justified in deleting the disallowance made in respect of expenditure on software purchase amounting to Rs.94,143/-
5. The CIT(A) ought to have appreciated that the expenses related to purchase of software which would be used for the development of its healthcare product. Hence the assessee derives enduring benefits from such software.
6. In the facts and circumstance of the case, the learned CIT(A) erred in holding that USD LIBOR is the correct rate to be adopted for evaluating the arm's length rate of international financial transaction