Commissioner Of Income-Tax vs Arawali Constructions Co. (P.) Ltd. on 9 July, 2002
3. Ground no.1 is against the sustenance of disallowance of software
expenses of `8,31,160. Facts apropos this ground are that the assessee claimed
deduction for `8.31 lakh towards software expenses. The Assessing Officer,
relying on the judgment of the Rajasthan High Court in CIT Vs. Arawali
Construction Co.P.Ltd. [(2003) 259 ITR 30 (Raj.)] held that the assessee cannot
be allowed deduction towards software expenses. In this view of the matter, he
treated such expenditure as capital in nature and allowed depreciation at the rate
of 25%. No relief was allowed in the first appeal.