Case Law Details
PCIT Vs Times Internet Limited (Delhi High Court)
Delhi High Court held that the computer software which are necessary and integral for the working of hardware are eligible for depreciation at the rate of 60% instead of 25%.
Facts- The appellant/revenue has preferred the present writ against OIO passed by ITAT. The appellant/revenue has mainly contested that ITAT has erred in deleting the disallowance of Rs. 20,84,878/- u/s. 14A r/w Rule 8D of the Income Tax Act; ITAT has erred in deleting disallowance made on account of depreciation for Rs. 32,12,253/- on software licences @25% and ITAT has erred in deleting the addition on account of software expenses by treating it as Revenue Expenses.
Conclusion- Held that via Cargo Motors (P) Ltd. v. Deputy Commissioner of Income Tax, the coordinate bench has ruled that the disallowance calculated under Rule 8D of 1962 Rules should factor in only investments made by an assessee to earn exempt income. Therefore, the said proposed question of law need not be considered by us.
The decision of the Tribunal concerning AY 2006-07 to AY 2008-09 concludes that the computer software which are necessary and integral for the working of hardware are eligible for depreciation @ 60%, as was claimed by the assessee.
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