Expenditure on software imports:
21. The learned AO erred in disallowing depreciation of Rs. 57,38,83,507/- on
imported software products used in-house ... depreciation in computing the total income.
23. The learned authorities below erred in proceeding on the basis that
payment for imported software
Sonata Information Technology Ltd, ... vs Assessee on 5 July, 2012
ITA No.1507 of 2012
cannot be sustained. The AO is therefore directed
to computed the enhanced profits on which eligible deduction ... disallowed claim of the Assessee for depreciation of
Rs.19,46,23,236/- on imported software products used by the Assessee in-house.
The assessee
claim of depreciation on electrical hardware and software license. The
assessee filed detailed chart in respect of depreciation claimed on UPS. The
assessee substantiated ... computer" including computer software". Note 7 to the
table defines computer software as any computer
onwards, on "computer including computer
software" depreciation has to be allowed to the tune of 60%. With the inclusion ... treated the
expenditure on acquiring the computer software as expenditure of capital
nature and rightly allowed depreciation as per rules
amendment rate of depreciation for computers was made to
read "Computers including computer software (See note ... treated as capital expenditure. However, at the same time
computer software depreciation has to be allowed at 60%.
Therefore, we set aside
claimed depreciation in respect
of computers @ 60%, but in the notes under
column 4, it has been mentioned that computers
includes ... computer is "computers
including computer software", further computer
software means "any computer
Datamatics Technologies Ltd ( Now Known ... vs Assessee on 11 December, 2012
IN THE INCOME TAX
including computer software 60%
(see Note 7 below Table) ".
Note 7 states that the computer software means any computer ... part of computers and since there
is no specific item of computer software in the depreciation
schedule for the impugned
software industry. The TPO however
held that the assessee is again looking at only IT and ITES
companies i.e who are predominately rendering software ... allow the working capital adjustment and depreciation adjustment
and to re-compute the total income of the assessee accordingly.
After making the said
