Itxa/1213/2009 Of The Comm Issioner Of Income Tax- 7 , Mumbai v. M/S. One Hour Photo Pvt. Ltd

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1213 OF 2009 The Commissioner of Income Tax ..Appellant. V/s. M/s. One Hour Photo Pvt. Ltd. ..Respondent. Mr. Suresh Kumar for appellant. Mr. P.J. Pardiwala, senior Advocate with A.K. Jasani for respondent. CORAM : V.C.DAGA AND J.P.DEVADHAR, JJ. DATED : 10TH AUGUST, 2009. P.C. :- 1.Heard learned counsel for the revenue. The appeal seeks to raise the following questions of law:- a. Whether on the facts and in the circumstances of the case and in law, the ITAT was justified in setting aside the issue of disallowance of software expenditure of Rs.2,06,799/- which was treated as capital expenditure without appreciating the fact that right to use the software is intangible assets as per amended provision of section 32(1)(ii) of the Income Tax Act, 1961 and consequently eligible for depreciation @ 25% as rightly held by the assessing officer ?the ITAT was justified in setting aside the issue of disallowance of software expenditure of Rs.2,06,799/- which was treated as capital expenditure without appreciating the fact that right to use the software is intangible assets as per amended provision of section 32(1)(ii) of the Income Tax Act, 1961 and consequently eligible for depreciation @ 25% as rightly held by the assessing officer ? b.Whether on the facts and in the circumstances of the case and in law, the ITAT was justified in allowing foreign tour expenses of Rs.72,502/- being personal in nature ignoring the fact that the assessee had admitted before the ITAT that business benefits or trade benefits which was derived from the tour of General Manager could not be established and further the assessee could not establish exemplary services rendered by the General Manager in the larger business interest of the assessee ?law, the ITAT was justified in allowing foreign tour expenses of Rs.72,502/- being personal in nature ignoring the fact that the assessee had admitted before the ITAT that business benefits or trade benefits which was derived from the tour of General Manager could not be established and further the assessee could not establish exemplary services rendered by the General Manager in the larger business interest of the assessee ? c.Whether on the facts and in the circumstances of the case and in law, the ITAT was justified in quashing the order of the CIT(A) and AO and allowing deduction u/s.80IB without appreciating the fact that the printing of photographs did not involve any manufacturing activities and the assessee company did not employee 10 or more workers in manufacturing process ? 2.So far as question (a) is concerned, the Tribunal has remanded the matter for consideration afresh in the light of the judgment of the Delhi Special Bench of the Tribunal in the case of Amway Enterprises V/s. CIT, 301ITR (AT) 1. In this view of the matter, no substantial question of law arises. 3.So far as question (b) is concerned, the Tribunal has taken into consideration the factual aspects and has recorded finding of fact that it was allowable business expenditure. Even otherwise, considering the small amount of expenditure in the backdrop of the huge magnitude of turnover of the assessee company, we do not consider it a question worth consideration. 4.So far as the last question is concerned, the Tribunal has recorded finding of fact that the assessee has employed more than 10 persons in its manufacturing unit as such assessing officer could not have denied deduction under section 80IA. No fault can be found with the view taken. No substantial question of law is involved. In the result, the appeal is dismissed in limini with no order as to costs. (J.P.DEVADHAR, J.) (V.C.DAGA, J.)