Income Tax Appellate Tribunal - Chennai
Toshniwal Instruments (Madras) Pvt ... vs Acit Corporate Circle 3(1), Chennai on 1 August, 2018
आयकर अपील य अ
धकरण, 'सी' यायपीठ, चे नई
IN THE INCOME TAX APPELLATE TRIBUNAL
'C' BENCH : CHENNAI
ी एन.आर.एस. गणेशन, या यक सद य एवं
ी अ ाहम पी. जॉज$, लेखा सद य के सम& ।
[BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND
SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER]
आयकर अपील सं./I.T.A. No.679/CHNY/2018
नधा रण वष /Assessment year : 2010-2011.
M/s. Toshniwal Instruments Vs. The Assistant Commissioner
(Madras) Pvt. Ltd, of Income Tax,
No.267, Kilpauk Garden Road, Corporate Circle 3(1)
Kilpauk, Chennai 600 010. Chennai 600 034.
[PAN AAACT 2305A]
(अपीलाथ)/Appellant) (*+यथ)/Respondent)
अपीलाथ क ओर से/ Appellant by : Shri. R. Vijayaraghavan, Adv.
यथ क ओर से /Respondent by : Shri. Clement Ramesh Kumar, JCIT.
सन
ु वाई क तार ख/Date of Hearing : 25-07-2018
घोषणा क तार ख /Date of Pronouncement : 01-08-2018
आदे श / O R D E R
PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER
In this appeal filed by the assessee, which is directed against an order dated 01.12.2017 of ld. Commissioner of Income Tax :- 2 -: ITA No.679/CHNY/2018 (Appeals)-11, Chennai, it is aggrieved that ld. Commissioner of Income Tax (Appeals) confirmed disallowance of claim of depreciation @60% on computer software worth F13,71,600/- acquired by the assessee.
2. Ld. Counsel for the assessee submitted that assessee had purchased a license to use software called Microsoft Dynamics- Ax 2009. As per the ld. Authorised Representative, assessee was manufacturer of vacuum pumps and gas flow meters and such software for the purpose of its business. Contention of the ld. Authorised Representative was that assessee had acquired only a license from Microsoft for using such software. As per the ld. Authorised Representative, assessee though it was eligible to claim expenditure of F13,71,600/- incurred for acquiring the license as a revenue outgo, had treated it as computer and claimed depreciation @60%. Submission was that lower authorities fell in error in restricting depreciation to 25% deeming the license to be only an intangible asset.
:- 3 -: ITA No.679/CHNY/2018 3. Per contra, ld. Departmental Representative strongly
supported the orders of the lower authorities. According to him, a license to use a software could not be bracketed alongwith computer for claiming depreciation at the rate of 60%.
4. We have considered the rival contentions and perused the orders of the authorities below. Rates on which depreciation is admissible on different assets is given in New Appendix I of the Income Tax Rules, 1962. Item No. (5) of this table gives the eligible rate of depreciation for ''computer including computer software'' at 60%. Note 7 given under the said appendix defines computer software as a computer program recorded on any disc, tape, perforated media or other information storage device. Assessee here had claimed depreciation on the license to use the Microsoft software called Microsoft Dynamics- Ax 2009 considering it as a computer software, coming within the above definition. There can be no dispute that even if it was only a license it still was computer program recorded on an information storage device. In our opinion, assessee was eligible for depreciation @60%. We set aside the orders of the lower authorities and direct the ld. Assessing Officer to allow :- 4 -: ITA No.679/CHNY/2018 depreciation @60% on 13,71,600/-, being the cost incurred for purchasing Microsoft Dynamics- Ax 2009.
5. In the result, the appeal of the assessee stands allowed. Order pronounced on Wednesday, the 1st day of August, 2018, at Chennai.
Sd/- Sd/-
(एन.आर.एस. गणेशन) (अ ाहम पी. जॉज$)
(N.R.S. GANESAN) (ABRAHAM P. GEORGE)
या यक सद य/JUDICIAL MEMBER लेखा सद य/ACCOUNTANT MEMBER
चे#नई/Chennai
$दनांक/Dated: 01 August, 2018
KV
आदे श क त'ल(प अ)े(षत/Copy to:
1. अपीलाथ /Appellant 3. आयकर आयु*त (अपील)/CIT(A) 5. (वभागीय त न/ध/DR
2. यथ /Respondent 4. आयकर आयु*त/CIT 6. गाड फाईल/GF