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Income Tax Appellate Tribunal - Ahmedabad

The Dcit, Circle-1(1)(1),, Vadodara vs Gujarat Green Revolution Co. Ltd.,, ... on 16 December, 2022

     आयकर अपीलीय अिधकरण,
                 अिधकरण अहमदाबाद  यायपीठ 'B' अहमदाबाद।
      IN THE INCOME TAX APPELLATE TRIBUNAL
                "B" BENCH, AHMEDABAD
 BEFORE SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER
                         AND
      MS. SUCHITRA R. KAMBLE, JUDICIAL MEMBER

                  Misc. Application No.133/Ahd/2020
                                   IN
                         ITA No.619/Ahd/2018
                          Assessment Year : 2013-14
     DCIT, Cir.1(1)(1)                   Vs. Gujarat Green Revolution Co Ltd.
     Vadodara.                               P.O. Fertilizernagar
                                             Vadodara.
                                             PAN : AABCG 0798 G

                 (Applicant)                              (Responent)

     Assesseeby :                    Ms.Amrin Pathan, AR
     Revenue by           :          Shri Rakesh Jha, Sr.DR

सन
 ु वाई क तार ख/ Date of Hearing     :         16/12/2022
घोषणा क तार ख / Date of Pronouncement:        16/12/2022

                                 आदे श/O R D E R

PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER

Present Misc. Application has been filed by the Revenue against the order of the ITAT passed in ITA No.619/Ahd/2019 vide order dated 14.10.2019 seeking rectification of a mistake therein .

2. The contentions of the application read as under:

"In the case of M/s Gujarat Green Revolution Co. Ltd for AY 2013-14, an appeal was filed by the department under appeal in ITA No.619/Ahd/2018 before the Hon'ble ITAT against the order of CIT(Appeals)-1, Vadodara dated 29.12.2017 APPEAL NO. CAB-1/ 10137/2016-17.The Hon'ble ITAT, while finalizing:

1. The appeal filed by the Department is dismissed by Hon'ble ITAT, Ahmedabad on the issue of disallowance of excess depreciation claimed on Software Licenses in light of decision of Special Bench of Hon'ble ITAT, Delhi MA No.133/Ahd/2020 2 in the case of Amway India Enterprises Vs. DCIT 111 ITD (SB) 112, ignoring the fact that Special Bench of Hon'ble ITAT, Delhi has remitted back the issue to the file of the AO for re-adjudication subject to certain directions .Therefore, the Hon'ble ITAT, Ahmedabad made mistake in dismissing the appeal of the revenue in respect of aforesaid issue.

2. Therefore, it constitutes a mistake apparent on record and hence it is prayed that same may be rectified.

Relief claimed in application

3. It is therefore prayed that the Hon'ble I.T.A.T. "A" Ahmedabad may recall its order dated 14.10.2019 in I.T.A. NO. 619/Ahd/2018, wherein the Hon'ble I.T.A.T. "A" Bench, Ahmedabad dismissed the appeal of the Department relying on the decision of Special Bench of Hon'ble ITAT, Delhi in the case of Amway India Enterprises Vs. DCIT 111 ITD (SB) 112 ignoring the fact that Special Bench of Hon'ble ITAT, Delhi has remitted back the issue to the file of the AO for re-adjudication subject to certain directions. Therefore, the Hon'ble ITAT, Ahmedabad made mistake in dismissing the appeal of the revenue in respect of aforesaid issue.

It is also prayed that the Hon'ble ITAT, Ahmedabad may kindly decide the grounds of appeal raised by the department on merits of the case.:

3. Referring to the above the ld.DR stated that mistake in the order of the ITAT in the present case, in ITA No.619/Ahd/2018, is that while dealing with ground no.3 raised by the Revenue against the deletion by the Ld.CIT(A),of addition made by the AO on account of excess depreciation claimed on software licences, the ITAT had held that the issue was covered in favour of the assessee by Special Bench decision in the case of Amway India Enterprise Vs. DCIT, 111 ITD 112 (Delhi-Trib)(SB). The ld.DR pointed out that the ITAT had misinterpreted the said decision while deciding the impugned issue of rate of depreciation allowable on software licences in favour of the assessee. He contended that the Special Bench in fact had restored the issue back to the AO with directions.That on account of this patent error in the order of the ITAT, the same needed to be rectified and hence the present MA. Copy of the order of the Special Bench of the ITAT in the case of Amway India Enterprise (supra) was placed before us.

4. On going through the contents of the same, it was noted by us that it was the department in fact which had misunderstood the decision of the Special Bench of the ITAT, while the ITAT had correctly applied the ratio laid down in the same. We have noted from the order of the Special Bench of the ITAT that there were two issues for adjudication before the ITAT;

• that whether the expenditure incurred on acquiring computer software or licence to use software, is be treated as revenue or capital in nature and • the rate of depreciation on such computer softwares whether to be allowed at the rate of 20% qualifying as tangible assets under the head "plant" or at the rate of 60% as per the amendment to the Income Tax Rules1962, brought w.e f 01- 04-1999, prescribing rates of depreciation.

It was only with respect to the issue of nature of expenditure incurred on acquiring licences for software, whether capital or revenue, that the Special Bench had laid down certain guidelines for deciding the same and had restored the matter to the AO to adjudicate in accordance with the guidelines so laid down. With respect to the rate of depreciation, it was categorically held that w.e.f. 1.4.1999 the computer software had been included with computers for the purpose of rate of depreciation in the Rules, entitling the assessee to rate of depreciation at the rate of 60% thereon and had held that the said amendment was prospective in nature and the assessee was entitled to depreciation at the rate of 60% on computer software w.e.f. 1-4-1999 as prescribed by the Rules.

Therefore, it is evident that the issue of rate of depreciation had not been restored back to the AO by the Special Bench of the ITAT, and the contention of the Revenue in this regard, we hold, therefore is incorrect. In the present case, the issue being the rate of depreciation to be allowed to the assessee on computer software, which the ITAT had allowed at the higher rate ,is in accordance with the Special Bench's decision in the case of Amway India Enterprise (supra) and there is no error in the order of the ITAT in this regard. The Miscellaneous Application filed by the Revenue being devoid of any merit, therefore stands rejected.

5. In result, the MA of the Revenue is dismissed.

Order pronounced in the Court on 16thDecember, 2022 at Ahmedabad.

    Sd/-                                                   Sd/-
(SUCHITRA KAMBLE)                                  (ANNAPURNA GUPTA)
JUDICIAL MEMBER                                  ACCOUNTANT MEMBER

Ahmedabad, dated     16/12/2022