Income Tax Appellate Tribunal - Mumbai
Truetzschler India P. Ltd, Mumbai vs Department Of Income Tax on 11 January, 2013
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCH 'E', MUMBAI
BEFORE SHRI DINESH KUMAR AGARWAL, JUDICIAL MEMBER
AND SHRI D. KARUNAKARA RAO, ACCOUNTAT MEMBER
I.T.A. NO.215/M/2012
ASSESSMENT YEAR: 2001-2002
ACIT-2(3), Vs. M/s. Truetzschler India Pvt. Ltd.,
Room No.556, Aayakar Bhavan, 43, Dr. V.B. Gandhi Marg, Fort,
Mumbai - 400 020. Mumbai - 400 001.
PAN: AAACF0742K
(Appellant) (Respondent)
Appellant by : Shri Manoj Kumar, DR
Respondent by : Ms. Sajini Sivaraman
Date of Hearing: 03.01.2013 Date of order: 11.1.2013
ORDER
Per D. KARUNAKARA RAO, AM:
This appeal filed by the Revenue on 10.1.2012 is against the order of CIT (A)6, Mumbai dated 3.11.2011 for the assessment year 2001-2002.
2. In this appeal, Revenue raised the following grounds which read as under:
"1. On the facts and in the circumstances of the case and in law, the Ld CIT (A) erred in directing the AO to allow depreciation @ 60% instead of depreciation allowed @ 25% in the assessment order ignoring the fact that inclusion of software was incorporated w.e.f 1.4.2004 vide Finance Act, 2003 ie from AY 2003-04.
2. For these and other grounds that may be urged at the time of hearing, the decision of the CIT (A) may be set aside and the of the AO resotred."
3. At the very outset, Ms. Sajini Sivaraman, Ld Counsel for the assessee brought to our notice that the issue in the ground raised related to the rate of depreciation allowable on the software. In this regard, both the parties brought our attention to the contents of sub-paras of para-7 from the impugned order and mentioned that no specific rate of depreciation was provided for the years prior to the assessment year 2003-2004. In such circumstances, the said rate of 60% expressly provided since the assessment year 2003-2004 onwards is applied to the instant assessment year 2 2001-2002 also. Paras 7.7 and 7.8 of the impugned order are relevant in regard which are reproduced as under:
"7.7 Since AY 2003-04 the rate of depreciation on software has been provided @ 60%. Prior to AY 2003-04 depreciation on "computers" was provided @ 60% as inserted by IT (twelfth Amendment) Rule 1998 w.e.f 1.4.1999 in the OLD APPENDIX-I. In the OLD APPENDIX-I (Applicable for AYs 2003-2004 to 2005-2006) it was provided that "Computer including computer software" shall be eligible for depreciation @ 60%. Thus, it is the reasonable to provide depreciation @ 60% for AY 2001-2002 when no specific rate of depreciation was provided separately for computer software but the 'computer software' being part of the "computer" qualifies for depreciation @ 60% as provided for "Computer".
7.8 In view of the above, the expenditure of Rs. 47,64,793/- is not allowable as revenue expenditure as it is a capital expenditure. The same, however, qualifies for depreciation @ 60%. The AO is directed to grant depreciation @ 60% of the computer software expenditure capitalized."
4. We have heard both the parties and perused the orders of the Revenue Authorities as well as the relevant material placed before us. Considering the above, we are of the opinion that when there is no specific rate of depreciation was provided separately for computer software, computer including computer software shall be eligible for depreciation @ 60%. Therefore, we uphold the order of the CIT (A) on this issue and allow the depreciation on 'computer software' which is ingredient of the 'computer' @60% for AY 2001-2002. This issue is covered in favour of the assessee by the decision of the Hon'ble Delhi High Court in the case of Indian Visit.com P. Ltd 176 Taxman 164 and also by the decision in the case of Varindar Agro Ltd. 309 ITR 272 Pubjab & Haryana High Court and Asahi India Safety Glass Limited Delhi High Court reported in 64 DTR 63. Accordingly, grounds raised by the Revenue are dismissed.
5. In the result, appeal filed by the Revenue is dismissed.
Order pronounced in the open court on this 11th day of January, 2013.
Sd/- Sd/-
(DINESH KUMAR AGARWAL) (D. KARUNAKARA RAO)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Date : 11.1.2013
3
At :Mumbai
Okk
Copy to :
1. The Appellant.
2. The Respondent.
3. The CIT (A), Concerned.
4. The CIT concerned.
5. The DR "E", Bench, ITAT, Mumbai.
6. Guard File.
// True Copy//
By Order
Assistant Registrar
ITAT, Mumbai Benches, Mumbai