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2.2. Learned Commissioner has also erred in relying upon the order of Hon'ble CIT(A) for A.Y. 2007-08 which was based on the wrong premise that depreciation schedule includes computer which in turn includes computer software on which 60% depreciation is allowable and therefore deduction of software expenses cannot be allowed. It is submitted it be so held now.

2.3. Learned Commissioner has erred in not giving direction to the learned AO to allow the depreciation at the rate of 60% on the software expenditure disallowed in the AY 2007-08 & 2006-07, while computing total income for the year under consideration.

"5.3. I have considered the facts of the case, assessment order and appellant's submission. Appellant purchased computer softwares for the purpose of its business however computer software is part of asset used for the purpose of business. It has been held in several decisions that computer software is a capital asset and part of computers for the purpose of claim of depreciation. As per depreciation schedule, item number 5 of machinery and plant section is computers including computer software on which 60% depreciation is allowable. Since computer software is clearly included as an item of asset eligible for depreciation, claiming the same @100 percent is not correct. In view of this, the addition made by the assessing officer is confirmed."