Reopening of assessment on ground that said expenditure was of enduring nature was unjustified

IT : Where expenditure on software charges was an annual expenditure and such fact had been disclosed by assessee, reopening of assessment on ground that said expenditure was of enduring nature was unjustified
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[2014] 52 taxmann.com 44 (Mumbai - Trib.)
IN THE ITAT MUMBAI BENCH 'I'
Deputy Commissioner of Income-tax
v.
India Infoline Insurance Services (P.) Ltd.*
VIJAY PAL RAO, JUDICIAL MEMBER
AND RAJENDRA, ACCOUNTANT MEMBER
IT APPEAL NO. 5758 (MUM.) OF 2011
[ASSESSMENT YEAR 2005-06]
JULY  21, 2014
Section 37(1), read with section 147 of the Income-tax Act, 1961 - Business expenditure - Allowability of (Software expenses) - Assessment year 2005-06 - Assessing Officer reopened assessee's assessment on ground that expenditure incurred by assessee under head software charges was of enduring nature and, therefore, was to be added to total income of assessee - Whether expenditure incurred on software charges could be held tangible material especially when it was an annual expenditure and said fact was disclosed by assessee - Held, no - Whether, therefore, reopening of assessment was bad in law - Held, yes [Paras 7 & 8] [In favour of assessee]