Income Tax Appellate Tribunal - Chennai
Tvs Finance & Services Limited, Chennai vs Department Of Income Tax on 31 January, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
'D' BENCH, CHENNAI
BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER
AND SHRI GEORGE MATHAN, JUDICIAL MEMBER
I.T.A. No. 1094/Mds/2011
(Assessment Year : 2004-05)
The Assistant Commissioner M/s TVS Finance & Services
of Income-Tax, Limited,
Company Circle III(2), v. Jayalakshmi Estates,
Chennai - 600 034. 29 (Old No.8), Haddows Road,
Chennai - 600 006.
PAN : AAACH6041B
(Appellant) (Respondent)
Appellant by : Shri K.E.B. Rengarajan,
Junior Standing Counsel
Respondent by : Shri Saroj Kumar Parida, Advocate
Date of Hearing : 31.01.2012
Date of Pronouncement : 31.01.2012
O R D E R
PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER :
In this appeal filed by the Revenue against the order dated 18.3.2011 of Commissioner of Income Tax (Appeals)-III, Chennai, it has raised four grounds in total. Grounds No.1 and No.4 are general in nature, needing no adjudication.
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2. Vide its ground No.2, grievance raised by the Revenue is that ld. CIT(Appeals) directed allowance of depreciation on software at the rate of 60%. As per the Revenue, for preceding assessment year 2003-04, the CIT(Appeals) had, on the issue of depreciation on software development , directed allowance of 25% and therefore, the order for the impugned assessment year went against such direction.
3. When the matter came up before us, learned A.R. submitted that depreciation allowable to software was at 60% as per the rules and Income-tax Act, 1961. There was no error in the order of ld. CIT(Appeals) in directing that the claim of assessee be allowed.
4. Per contra, learned D.R. submitted that for the preceding assessment year, ld. CIT(Appeals) had directed allowance at the rate of 25% only.
5. We have perused the orders and heard the rival submissions. There is no dispute that the question was regarding rate of depreciation allowable on software. For the impugned assessment year, as per Appendix I of Income-tax Rules, 1962, the rate of depreciation mentioned at III(5) is 60% for computers including computer software. Notes to the said Appendix at Sl.No.7 states that the "Computer software" means any computer program recorded on 3 I.T.A. No. 1094/Mds/11 any disc, tape, perforated media or other information storage device. There is no case for the Revenue that the software in question did not fall under the said Appendix. This being so, the rate of depreciation allowable was definitely 60% irrespective of what was decided by the CIT(Appeals) in the preceding assessment year. Therefore, we are of the opinion that ld. CIT(Appeals) was justified in directing the A.O. to allow depreciation at 60%.
6. Ground No.2 stands dismissed.
7. Vide its ground No.3, grievance of the Revenue is that ld. CIT(Appeals) deleted the disallowance of lease equalization charges made by the A.O. while computing book profit under Section 115JB of Income-tax Act, 1961 (in short 'the Act').
8. When the issue came up before us, learned A.R. pointed out that ld. CIT(Appeals) followed the decision of Hon'ble jurisdictional High Court in the assessee's own case reported in 318 ITR 435 and decided that lease equalization charge debited was not a reserve and could not be added back to profits of company under Section 115JA of the Act.
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9. Learned D.R. fairly admitted that the issue stood covered in favour of assessee by the above decision of Hon'ble jurisdictional High Court.
10. We do not find any decision of Hon'ble Apex Court which goes against the decision of Hon'ble jurisdictional High Court in the assessee's case mentioned supra, where it was held that lease equalization charges could not be considered as reserve and added back to the profits for working out the book profit. We do not find any error in the order of ld. CIT(Appeals) .
11. Ground No.3 stands dismissed.
12. In the result, appeal filed by the Revenue is dismissed. Order pronounced in the open court after conclusion of hearing on 31st January, 2012.
sd/- sd/-
(George Mathan) (Abraham P. George)
Judicial Member Accountant Member
Chennai,
Dated the 31st January, 2012.
Kri.
Copy to: Appellant/Respondent/CIT(A)-III, Chennai/ CIT-I, Chennai/D.R./Guard file