TMI Blog2011 (2) TMI 454X X X X Extracts X X X X X X X X Extracts X X X X ..... g that no substantial question of law arose - Hence, ubstantial question of law raised is decided against the revenue. - 414 of 2006 - - - Dated:- 25-2-2011 - MR.JUSTICE ADARSH KUMAR GOEL, MR.JUSTICE AJAY KUMAR MITTAL, JJ. Ms. Urvashi Dhugga, Senior Standing Counsel for the appellant. Mr. Kamal Sehgal, Advocate for the respondent A DARSH KUMAR GOEL, J ( Oral) . 1. Since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the expenses under the head 'office equipment' but claimed depreciation @ 100%? ii) Whether on facts and in the circumstances of the case, the ITAT was right in treating the computer software expenses as revenue expenses despite the fact that the expenses were incurred in obtaining advantage of enduring nature and the expenditure was capitalized by the assessee itself? iii) Whether on fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e parties. 5. Learned counsel for the revenue submits that expenditure should have been treated to be on office equipment as per proviso to Explanation 5 of Section Section 32. 6. We are unable to accept the submission. Section 32 applies only for depreciation in respect of capital asset and not to revenue expenditure. In the present case, the Tribunal has recorded a finding that expenditu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, obsolescence takes place very fast. Secondly, the expenditure is not on any physical asset having any wear and tear. Having regard to these aspects the courts tend to ordinarily treat the expenditure on software development to be revenue expenditure only. It is not the case of the revenue that the expenditure incurred is exceptionally high or otherwise of very special nature. I, therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 377 (SC) to the effect that it would be unrealistic to ignore rapid advances in research and to attribute a degree of endurability and permanence to the technical know how at any particular stage in fast changing area of science. 8. In view of above, we do not find any ground to interfere with the view taken by the Tribunal. Substantial question of law raised is decided against the revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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