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3. On the facts and in the circumstances of the case and in law the learned CIT(A) has erred in deleting the addition of Rs.4,27,172/- made by the AO on account of software expenses by treating them as capital in nature. The C1T(A) failed to appreciate that as per new appendix-1 of the Income Tax rules, 1962, 'Computers including computer softwareincluded in the block of' Machinery and Plant‟ is eligible for depreciation @ 60%. This does not make difference between the „application software‟ and the „system software‟."