Document Fragment View

Matching Fragments

:: 31 ::

for AY 2011-12 are no longer res integra. Therefore, we take up the issues on merits which are arising from these appeals.
35. The sole issue arising from assessee's appeal, relates to depreciation on software license.
36. Brief facts are that the assessee company had claimed depreciation on computer software @ 60% by including it in the block of computers.

However, the AO included the Software license in the block of "Intangible Assets" rather than "Computer" for the purpose of computing depreciation as per the Act and restricted the depreciation @ 25%, on the reason that the assessee has shown the same as intangible assets and consequently, disallowed Rs.77,70,000/-.

11.0 We now proceed to take up the remaining issues raised in the appeal of the revenue save those adjudicated herein above. The first issue raised by the revenue is regarding depreciation on computer software raised vide ITA Nos. 491 492, 494, 495 & 496 /Chny/2018 for AYs: 2008-09, 2010-11, 2012-

13, 2013-14, 2014-15. As regards ITA No. 491 for AY-2008-09 is concerned the Assessment order per se which is based upon proceedings u/s 147 / 148 has been found to be barred by limitation on account of suffering from incurable deficiencies. The appeal of the revenue for impugned year vide ITA No. 491 for AY-2008-09 is therefore dismissed in limine. 11.1 The issue seminal to all the remaining ITA Nos. 492, 494, 495 & 496 / Chny / 2018 for AYs: 2010-11, 2012-13, 2013-14, 2014-15 contested by the appellate revenue is regarding allowance of depreciation on computer software. It is the case of the revenue that the assessee is eligible for claim of depreciation @ 25% on computer software since the license to use software is an intangible asset and that therefore the action of Ld. CIT(A) is erroneous in allowing depreciation @ 60%. For the purposes of this appeal the figures for the AY-2010-11 are taken. The Ld. AO had noted the fixed asset schedule of the assessee showed that for the "block computers" depreciation has been claimed at 60% and that the same included an amount of Rs.3,25,90,355/- being on account of computer software. The Ld. AO subscribed to the view that a computer software is an intangible asset for which permissible depreciation was @ 25%. The Ld. AO observed that in the present case the assessee company was not the owner of the software but had merely acquired license to use and therefore admissible for 25% depreciation. Before the Ld.AO the assessee had argued that within the meanings of AS 26 or accounting standard 26 - intangible asset, it was eligible for depreciation @ 60%. The Ld CIT(A) held that that within meanings of new appendix to Rule 5 of Income Tax Rules , computors including computer software are eligible for depreciation @ 60%. Consequently he allowed depreciation @ 60%. While doing so he relied upon the decision of Hon'ble coordinate bench of this ITA No.1279 & 1338/Chny/2024 (AY 2008-09) ITA Nos.1281, 1488 & 1489/Chny/2024 (AY 2011-12) M/s. Cholamandalam MS -