EDGEVERVE SYSTEMS LIMITED ,BANGALORE vs. ACIT, CIRCLE-2(2)(1), BANGALORE

ITA 292/BANG/2025Status: DisposedITAT Bangalore30 January 2026AY 2019-20Bench: SHRI WASEEM AHMED (Accountant Member), SHRI SOUNDARARAJAN K (Judicial Member)1 pages
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What did the Tribunal hold?

The Tribunal allowed the admission of the additional ground and held that software expenses, if application software with enduring benefit, are revenue expenditure. Foreign tax credit was allowed as business expenditure for statistical purposes.

What were the facts?

The assessee claimed software license fees as revenue expenditure, but the AO treated it as capital expenditure and allowed depreciation. The assessee also raised an additional ground regarding foreign tax credit as business expense.

What were the issues?

Whether software license fees are revenue or capital expenditure, and whether foreign taxes paid are allowable as business expenses.

Which sections of the Income-tax Act were involved?

Section 37,Section 90,Section 91,Section 35(2AB),Section 234B,Section 234A,Section 234C,Section 234D

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Cases cited in this judgment(10)Show list

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Income Tax Appellate Tribunal, ‘A’ BENCH, BANGALORE

Before: SHRI WASEEM AHMED & SHRI SOUNDARARAJAN K

For Appellant: Shri Padamchand Kincha, CA
For Respondent: Shri Shivanad Kalakeri, CIT (DR)
Hearing: 11.12.2025Pronounced: 30.01.2026

PER WASEEM AHMED, ACCOUNTANT MEMBER:

These five appeals filed at the instance of the assessee, are directed against the separate orders of the National Faceless Appeal Centre, Delhi (hereinafter the Ld. CIT(A)) passed under section 250 of the Income Tax Act, 1961 (hereinafter, the Act) for A.Ys. 2017-18 to 2021-22, which were heard together.

2.

First, we take up ITA No. 290/Bang/2025 pertaining to A.Y. 2017- 18 as the lead case. The assessee, in the memo of appeal, has raised four grounds bearing numbers as 1.1, 2.1 to 2.3, 3.1 to 3.4 and Ground No.

4.

ITA Nos.290 - 294/Bang/2025

3.

The assessee

The order continues below.

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