TMI Blog2023 (2) TMI 590X X X X Extracts X X X X X X X X Extracts X X X X ..... ication software while prescribing 60% depreciation thereon. Therefore, the distinction pointed out by the ld.DR that software of the assessee was utility software and such softwares qualify as intangible assets for the purposes of rate of depreciation, we hold is of no relevance. No reason to interfere in the order of the ld.CIT(A) upholding the claim of depreciation at the rate of 60%. The ground of appeal of the Revenue is rejected. - ITA No.297/AHD/2020 - - - Dated:- 25-1-2023 - SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND SMT. MADHUMITA ROY, JUDICIAL MEMBER, JUDICIAL MEMBER Assesseeby : Shri Dhinal Shah, AR Revenue by : Shri V.K. Mangla, Sr.DR ORDER PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER Present appeal has been filed by the Revenue against order of the ld.Commissioner of Income-Tax (Appeals)-8, Ahmedabad [hereinafter referred to as the ld.CIT(A) ] dated 18.2.2020 passed under section 250 of the Income Tax Act, 1961 [hereinafter referred to as the Act for short] pertained to the Asst.Year 2015-16. 2. Sole grievance of the Revenue is against allowance of depreciation on computer software at the rate of 60% as opposed to 25% held to be allowa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the CIT(A), the appeal of the revenue is thus bereft of any merits. Since the issue stands covered squarely by the binding decision of Hon'ble ITAT, Ahmedabad in the appellant's own case it is to be held that appellant is entitled to depreciation @ 60% on the impugned computer software. Accordingly, AO is directed to allow depreciation @ 60% on the computer software under consideration. Accordingly, Ground No. 1 of the appeal is allowed. 4. The contentions of the Revenue before us, which was submitted in writing also, was to the effect that the ITAT while deciding issue in the case of the assessee in the preceding Asst.Years 2010-11 to 2012-13 has placed reliance on its own decision in the case of ACIT Vs. Zydus Infrastructure P.Ltd., 72 taxmann.com 199 (Ahd-Trib) which was distinguishable on facts, since in the said case, the software was basically systems software on which the computer hardware ran and noting the fact that it wasimpossible to use the computer without this software, the ITAT held, it was entitled to depreciation on computer software at the rate of 60%. The contention of the Revenue was that in the present case, the software purchased was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... New Appendix I read with Note 7. 6. Mr. R. Hemalatha, learned Senior Standing Counsel appearing for the Revenue would vehemently contend that what were acquired by the assessee were only licenses, which are intangible. However, the Assessing Officer held that they would fall under Part B of New Appendix I and that the assessee was entitled to depreciation at 25%. 7. As noticed above, the assessee is in the business of registrar and transfer agent as licensed by the SEBI handling large volume of market sensitive data and information, which is available only through general customized application software. The assessee acquired software licenses capitalized during the relevant years in the books of accounts and claimed depreciation at 60%. In paragraph 20 of the order passed by the Tribunal, the nature of items, on which, the assessee claimed depreciation at 60%, has been listed out and they are 17 in number, from which, we find that substantial amount of server licences, which have been obtained by the assessee are customized and some of which are single user licenses. 8. The question would be as to whether the software application, which was acquired by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defines 'computer software' in Clause 7 to mean any computer program recorded on disc, tape, perforated media or other information storage device. Noteworthy to mention that the notes contained in the appendix, the term 'computer' has not been defined. Therefore, as pointed out by the Division Bench in Bimetal Bearings Ltd. (supra), if a particular article would fall within the description by the force of words used, it is impermissible to ignore the word description. Thus, going by the usage of the equipment purchased by the petitioner, we have to take a decision. 12. As held in the above decision, if a particular article would fall within the description by the force of the words used, it is impermissible to ignore the word 'description' and going by the usage of the equipment purchased by the assessee, a decision has to be arrived at. We find that there is no error in the decision arrived at by the Tribunal by taking note of the specific entry in contra distinction with the general entry. Therefore, the first substantial question of law has to be necessarily answered against the Revenue. 6. He further contended that in any case, SAP software ..... X X X X Extracts X X X X X X X X Extracts X X X X
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