Income Tax Appellate Tribunal - Chandigarh
Rockman Cycle Industries Ltd., ... vs Assessee on 4 October, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
CHANDIGARH BENCH 'A', CHANDIGARH
BEFORE Ms. SUSHMA CHOWLA, JUDICIAL MEMBER
AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER
ITA No. 213/Chd/2011
(Assessment Year : 2003-04)
Rockman Cycle Industries Ltd., Vs. The A.C.I.T.,
G.T. Road, Circle-V,
Ludhiana. Ludhiana.
PAN: AAACR 7866E
(Appellant) (Respondent)
Appellant by : Shri Subhash Aggarwal
Respondent by : Shri Akhilesh Gupta, DR
Date of hearing : 04.10.2012
Date of Pronouncement : 29.11.2012
ORDER
PER SUSHMA CHOWLA, J.M, :
The appeal filed by the assessee is against the order of the Commissioner of Income-tax (Appeals)-II, Ludhiana dated 05.01. 2011 r e l a t i n g t o a s s e s s m e n t ye a r 2 0 0 3 - 0 4 a g a i n s t t h e o r d e r p a s s e d u n d e r section 143(3) of the Income Tax Act, 1961 (in short 'the Act').
2. The only ground of appeal raised by the assessee reads as under:
"1. That the learned CIT(A) has erred in confirming the order of the A.O. capitalizing the software expenses Rs.8,58,000/-."
3. The only issue raised in the present appeal is against the disallowance of software expenses. The learned A.R. for the assessee at the outset pointed out that the issue stands covered in favour of the assessee by the decision of the Hon'ble Delhi High Court in CIT Vs. 2 Amway India Enterprises [(2012) 346 ITR 341 (Del)] and various other decisions.
4. The learned D.R. for the Revenue placed reliance on the order of the CIT (Appeals).
5. We have heard the rival contentions and perused the record. The issue in the present appeal is in relation to the claim of expenditure on account of software expenditure amounting to Rs.8,58,000/-. The said issue was remitted back to the Assessing Officer by the Tribunal vide order dated 15.5.2008 in ITA No.88/Chd/2008 to decide the same in line with the ratio laid down by the Special Bench of Mumbai Tribunal in Amway India Enterprises Vs. DCIT reported in 21SOT 1 (SB)(Del). The authorities below held the said expenditure not allowable in view of the functional test as laid down by the Special Bench of the Tribunal in the case of Amway In dia Enterprises Vs. DCIT (supra). The learned A.R. for the assessee stated that the said decision of the Special Bench has been reversed by t he Hon'ble Delhi High Court in CIT Vs. Amway India Enterprises reported in (2012) 346 ITR 341 (Del). The learned A.R. for the assessee had also placed reliance on the other decisions.
6. We find that the ratio laid down by the Special Bench of the Tribunal in Amway India Enterprises (supra) has been reversed b y the Hon'ble Delhi High Court in CIT Vs. Amway India Enterprises (supra). However the definition of computer has been enlarged to include computer software w.e.f. 1.4.2003. The old Appendix I applicable for a s s e s s m e n t ye a r s 2 0 0 3 - 0 4 t o 2 0 0 5 - 0 6 t a b u l a t e s t h e r a t e s o f d e p a r t m e n t admissible as per Part A-Tangible Assets, Sub head III Machinery and Plant, Col. (5) provides 60% department to computers including computer software. Note 7 below the Table defines computer software. 3
7. The Assessing Officer from the explanation of assessee dated 17.9.2009 noted the assessee to have purchased advanced version of software for increasing the efficiency of his business. In view of the amended provisions of the Act, we hold that the assessee is entitled to 60% depreciation on the aforesaid computer software, which has been worked b y the Assessing Officer and confirmed by the CIT (Appeals). Thus upholding the order of CIT (Appeals), we dismiss the ground of appeal raised by the assessee.
8. In the result, the appeal of the assessee is dismissed.
Order Pronounced in the Open Court on 29th day of November, 2012.
Sd/- Sd/- (MEHAR SINGH) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 29th November, 2012 *Rati*
Copy to: The Appellant/The Respondent/The CIT(A)/The CIT/The DR.
Assistant Registrar, ITAT, Chandigarh