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2021 (1) TMI 993 - AT - Income TaxDisallowance of depreciation of software @60% - Claim allowed by the ld AO @25% - CIT(A) allowed the claim of assessee - HELD THAT:- DR could not show us any reason that why we should deviate from the orders of the coordinate bench in assessee’s own case, as far as the rate of depreciation on the software is concerned. With respect to the existence of the work in progress we have already dealt with this issue earlier wherein reading the management discussion and analysis in the director’s report clearly shows that assessee has several of the software, it cannot be said that assessee does not have the asset on which depreciation is claimed. Naturally, when the software is developed in-house as stated by the assessee, there cannot be any bill for purchase of the software. The assessee has maintained the books of accounts and shown the work in progress therein which is evident from the fixed assets schedule, on which depreciation is year by year by year claimed and allowed. Though the learned assessing officer has challenged the existence of the software for the first time during the year, however, the assessee has been allowed depreciation at least at the rate of 25% on the software in earlier years also. Thus, the learned CIT – A has correctly held that it is not a fictitious asset. Accordingly, we uphold the order of the learned CIT appeal while allowing depreciation on the software holding it to be an actual asset and allowing depreciation thereon at the rate of 60% following the order of the coordinate bench in assessee’s own case for earlier years. Addition u/s 68 - cash credit in the books of accounts - HELD THAT:- For proving the identity of the party, the assessee submitted the permanent account number, and income tax jurisdiction of the investor company is, Bank statement of the investor company is and copies of the returns of those investors. With respect to the creditworthiness and genuineness of the investor, assessee submitted the audited financial statement of the investor company and bank statement showing the relevant entries of Davidson credits of the investor company is to show the sources of the funds. With respect to the genuineness of the transaction, assessee once again submitted the confirmations of the above parties were issued the convertible warrants. As assessee has submitted the complete details before the assessing officer and therefore the initial onus cast on the assessee has been discharged. Further, the learned assessing officer has also not made any enquiry with respect to the above depositors. The inquiries made in the subsequent years clearly show that assessing officer is satisfied with respect to the creditworthiness and the genuineness of the transaction of issue of shares warrant of ₹ 220 crores. No infirmity in the order of the learned CIT – A in deleting the above addition - Decided in favour of assessee.
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