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2019 (7) TMI 427 - AT - Income TaxDisallowance of depreciation claimed on special software - @ 25% OR 60% - HELD THAT:- It is the case of the Revenue that the depreciation on computer softwares is allowable @ 25% being intangible assets and not @ 60% applicable to computer softwares as claimed. We straightaway notice that the identical issue has come up before the Tribunal in large number of cases including M/s.Navneet Publications (I) Ltd. vs. Addl. CIT [2011 (1) TMI 1550 - ITAT MUMBAI] & ACIT vs. Zydus Infrastructure (P.) Ltd. [2016 (8) TMI 696 - ITAT AHMEDABAD] wherein it was held that licenced software is also eligible for depreciation @ 60%. In view of the issue has already been adjudicated in this fashion, we do not see any perceptible reason to interfere with the order of the CIT(A). the appeal of the revenue is thus bereft of any merits. Disallowance of ‘rent equalization reserve’ treating the same as mere provision in the books - HELD THAT:- Assessee is entitled for bifurcation of lease rentals as per Guidance Note prescribed by ICAI, in the absence of any express bar in the Income Tax Act regarding the application of such Accounting Standards/Guidance Notes. Therefore, we find merit in the action of assessee based on recognized accounting guidance of ICAI. The Income can be deduced by assessee based on such Accounting Standards/Guidance Notes where the statute is silent. CIT(A) is accordingly set aside and the Assessing Officer is directed to allow the claim of the assessee towards rent equalization reserve Allowability of interest expenditure as revenue expenditure u/s 36(1)(iii) - HELD THAT:- Noticeably, the pre-amended proviso to section 36(1)(iii) applicable for the relevant assessment year in question (prior to its amendment by Finance Act, 2015) prohibited claim of interest on revenue account only where capital was borrowed for acquisition of an asset for ‘extension of existing business or profession’ and therefore, so long as the capital borrowed resulted in acquisition of asset without resulting in extension of existing business per se, the deterrence embodied in proviso was not applicable and consequently the claim was governed by main provision of section 36(1)(iii) of the Act. In view of the aforesaid position of law subsisting for the assessment year 2010-11 in question, we do not see any infirmity in the action of the CIT(A) in upholding the claim of the assessee under s.36(1)(iii) on revenue account. An enunciation of law in this regard is available in Vardhman Polytex Ltd. vs. CIT [2012 (9) TMI 519 - SC ORDER] wherein referred to another decision of Core Healthcare Ltd. [2008 (2) TMI 8 - SUPREME COURT] and answered the issue in favour of assessee. It was held that interest paid in respect of borrowings for acquisition of capital assets is an allowable deduction under s.36(1)(iii) of the Act regardless of the fact that the capital assets acquired were not put to use in the concerned Financial Year in question. In the light of position of law explained by the Hon’ble Supreme Court, we decline to interfere with the order of the CIT(A). Ground raised by the Revenue is dismissed.
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