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2017 (8) TMI 73 - AT - Income TaxDepreciation on expenditure incurred on the development of software as well as purchase of software is capital in nature - at the rate of 25% or at the rate of 60% - Held that:- Income Tax Act, 1961 and the Income Tax Rules, 1962 prescribe the rate of depreciation on computer software at the rate of 60% from 01/04/2003, prior to which the rate of depreciation was 25% only. Hence, as per the rate prescribed by the Income Tax Rules, the assessee is entitled to depreciation at the rate of 60% and the action of the assessee in claiming the depreciation on the basis of the amended rate of depreciation on software cannot be faulted with and the same cannot be restricted to 25% merely on the ground that depreciation was claimed at the rate of 25% till assessment year 2003-2004. Although, the assessee has classified the software under ‘computer software and intellectual property rights’, it is very well settled that nomenclature cannot be conclusive and decisive regarding the nature of transaction and it is the substance of the matter which should be looked into rather than the form or the nomenclature by which the same might have been called. - Decided against revenue
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