Bg Exploration & Production India Ltd., ... vs Dcit, International Taxation, ... on 3 April, 2019
IN
ought to have allowed depreciation of Rs.2,89,808 on
software expenses held as capital in the earlier years ... case and comparing net profit margins with
external comparables for computing the arm's length price of
international transactions of its Manufacturing
assessee had
made the aforesaid payment for purchasing a depreciable asset, viz.
Computer software, therefore, disallowed the same as a 'revenue
expenditure
Draft
Assessment Order (DAO) the AO has disallowed the
depreciation on the computer software on the ground that the
transaction itself ... towards depreciation claimed on the above asset, in the computation
of total income, the AO observed that the assessee claimed
without appreciating the fact that computer software formspart of
computers for the purpose of allowing depreciation ... expenditure
incurred on purchase of computersoftware/License to use computer
software, either for one year or for more than one yearcannot be
allowed
various software applications, purchase of new software licenses of Oracle
Data Base, Anti Virus Software, Support Charges for Software Items etc. AO
observed that ... Computer including computer software is 60%.
Further, note 7 below Part - B says:
"Computer Software" means
allowing depreciation @ 60% on computer
peripherals except CTP, on which rate of depreciation was restricted to
15%, but, additional depreciation @ 20% was granted ... claim for additional depreciation to the effect that: 'computer
and computer software is out of the ambit of plant
been shown
9
towards depreciation on computer hardware and
software. The same may be accepted or rejected but
such value of the inventory
Page 2 of 6
Claim of depreciation on Computer including Computer software
4. failed to appreciate that the addition / classification ... Company has correctly capitalized hardware and software under
"Computers including computer software" which forms part of the "Plant
table of rates for depreciation in Appendix-I in respect of 'computers including computer softwares'.
16. There is another ... computers including computer software' was introduced for and from asst. yr. 2003-04. Therefore, the alternative plea claiming depreciation