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No denial of additional dep. as it isn’t mandatory to use new P&M for manufacture of article or thing

March 12, 2020[2020] 115 taxmann.com 154 (Bangalore - Trib.)
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INCOME TAX: Persons working in software industry could not be said to be 'workmen' for purpose of section 80JJAA

INCOME TAX: Where new employee hired by assessee company had worked for more than 300 days during relevent assessment year, assessee could not be denied deduction under section 80JJA on wages paid to these employees on ground that in first year of employment, deduction on wages paid to these new employees was refused as they did not worked for 300 days then for relevant succeeding years also deduction could not be allowed

INCOME TAX: Where assessee company planned expansion of its business premises and in that regard incurred certain expenses for employing consultants and contractors for planning designing and constructing new building, however, later on assessee abandoned said expansion plan and, accordingly, entire expenditure incurred towards such expansion was written off in profit and loss account, impugned expenditure incurred by assessee being in nature of capital expenditure could not be allowed

INCOME TAX: As per proviso to section 32(iia) new machinery or plant should be used by an assessee, engaged in business of manufacture or production of any article or thing, and it is not necessary that new machinery or plant should be used in manufacturing or production of any article or thing; therefore, assessee, engaged in business of software development, could not be denied additional depreciation on its asset for reason that plant and machinery on which additional depreciation was claimed should mandatorely be used in manufacture of article or thing

Income Tax: Where assessee obtained certain vehicles on lease under finance lease arrangement, no tax at source was to be deducted under section 194C on payment towards lease rentals

INCOME TAX: Where assessee, engaged in business of software development made payment towards acquiring electronic design automation (FDA) software license, on behalf of its parent company, since assessee had acquired no right or interest in EDA tools and had only a right to use software, impugned payment made by assessee was to be allowed as revenue expenditure

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