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2017 (10) TMI 1578 - AT - Income TaxDisallowance of deduction u/s 80IAB - income derived from 'Operation and Maintenance Activities' of SEZ are not eligible for such deduction - HELD THAT:- As decided in own case [2016 (8) TMI 696 - ITAT AHMEDABAD] from going through the proviso (2) of section 80-IAB of the Act as referred above, which says that if the work of operation and maintenance of SEZ is transferred from one developer to another then the deduction allowable in subsec. (1) of sec. 80-IAB will be allowed to transferee developer for the remaining period of the remaining of consecutive 10 years. This proviso gives a very clear picture that when the transferee is eligible for deduction u/s 80-IAB for the income from operation and maintenance of SEZ then certainly transferor i.e. developer is eligible for deduction u/s 80-IAB from operation and maintenance. From going through the letter issued by Government of India Ministry of Commerce & Industries dated 21st June, 2006 to the assessee for setting up of a sector specific Special Economic Zone for Pharmaceuticals at Ahmedabad, we find that in clause (ii) under the main clause (III) referring to general condition it reads that operation and maintenance of the facilities will be met as per the standard in the specific manner and proposition of the user. Thus we are of the view that assessee being a developer of SEZ is eligible for deduction u/s 80-IAB for income earned from operation and maintenance of SEZ. - Decided in favour of the assessee. Depreciation on computer software licence - @60% instead of @25% allowed by the AO - HELD THAT:- It is almost a settled issue that software application which are having validity for long term period are basically system software on which computer hardware runs and it is impossible to use computer without having such software installed on it and, therefore, such licensed software are subject to depreciation @ 60% and Id. CIT(A) has done so. We find no reason to interfere with the order of Id. CIT(A) on this issue.
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