Indian Kanoon - Search engine for Indian Law

vii. Restricting claim of depreciation to 25% as against 60% claimed by the appellant.

In addition to the above disallowances, the AO initiated penalty proceedings u/s 271 BA of the Act and denied the carry forward of credit u/s 115JAA(4) of the Act.

4. Aggrieved by the disallowances, the assessee filed appeal before CIT(A). The CIT(A) partly allowed the appeal of the assessee.

5. The Ld. AR submitted that Ground No. 1 of the assessee's appeal and the Department's appeal is covered in favour of the assessee for Assessment Year 2007-08 by the Hon'ble Delhi High Court's decision in case of the assessee's own appeal. As relates to Ground No. 2, the Ld. AR relied upon the judgment of Infra Soft Ltd. 2014 to 20 Taxman 273 of the Hon'ble Delhi High Court which covers the issue in favour of the assessee. As related to Ground No. 3, the Ld. AR relied upon the decision of the Hon'ble Supreme Court in case of CIT Vs. Woodward Governor India Pvt. Ltd. 2009 312 ITR 254 which is covered in favour of the assessee. Ground No. 4 is related to business income. The Ld. AR submitted that there were three types of miscellaneous income that are unserved notice payable interest, income and miscellaneous income including Sundry balance written back state cheques and other miscellaneous income. The Ld. AR submitted that income from unserved notice pay arises when salary of the employees are reversed due to the reason that they do not serve the notice period. If salary is allowable business expenditure then on similar analogy income arising due to the reason of such salary had to be reversed because of the notice borrowed remaining unserved should also be the part of business income. As relates to interest income it is generated from incidental activity and the same is business income. Thus, these additions are not proper because the miscellaneous income u/s 10B is in-fact a business income. The Ld. AR as related to Ground relating to depreciation on software submitted that computer includes computer software and hence ample for depreciation at 60%.

11. As relates to Ground No. 5, the Ld. AR's contention that the computer includes computer software and, therefore, eligible for depreciation of 60%. There is a separate entry in Income Tax Rules for depreciation on software at 60%. The CIT(A) has rightly held that there is no ambiguity in this case that computer software purchased would not be eligible for depreciation at 60%. Ground No. 5 of the Revenue's appeal is dismissed.

12. In the result, the appeal of the Revenue is dismissed and the appeal of the assessee is allowed.