erred in treating the capital expenditure on the
computer software development expenses of Rs.49,02,820/- as
revenue expenditure without appreciating ... appreciating the fact that the computer software
& peripherals on which the assessee has claimed depreciation &
60% is in actuality an intangible
appendix applicable from AY 2006-07,
depreciation on computer and computer software is to be allowed ... justified in allowing depreciation at 25%. We, therefore, direct AO to
allow depreciation on the computer software at 60%. This ground is
partly
Zenith Computers Ltd. Bombay (copy enclosed)] towards purchase of computer software, The said computer software is subject to accelerated ... software, for which assets no depreciation rate has been prescribed, depreciation has correctly been worked out as per the Depreciation Table under Appendix
previous year and claimed depreciation as under:-
S. Description of Amount % of Amount
No Assets Depreciation
1 Computers &Systems ... action of the AO in
disallowing depreciation on these software tools is upheld.
4.11 As regards Computers and Systems, here
Disallowance of depreciation on software
12.1 The assessee claimed depreciation @ 60% on 'Software'. The Ld.
AO held that as per depreciation schedule Rule ... computers including software'. The word 'including'
implies that only computer systems having inbuilt software i.e., computer
computer software. The AO
treated the servers as not part of the computers but treated it as Plant &
Machinery. Depreciation ... Software' and are eligible for depreciation at the
rate of 60%; Therefore depreciation on servers will be allowed at the rate
applicable to computers
erred in directing the AO to grant depreciation @ 60% on
computer software as against 25% granted by the AO ignoring the fact
that ... direct the AO to allow depreciation on computer software @25%.
32. In the result, Revenue's appeal
Ground No.14 is with
regard to claim of depreciation on computer software and
ground Nos.15 and 16 are with respect ... software. We found the claim of depreciation on computer
software is covered by the decision of the Special Bench of
Tribunal
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
provides the depreciation @60% on the computer
software and the term 'computer software' has a/so been
denied ... asset is
"computers including computer software'. The meaning of computer
software is also given in note
