Case Law Details
DCIT Vs Vodafone Business Services Ltd. (ITAT Ahmedabad)
ITAT Ahmedabad held that depreciation on licenses software is allowable at the rate of 60% and not at the rate of 25% as alleged by the revenue.
Facts- Present appeal has been filed by the Revenue against order of the the ld.CIT(A) on the 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 allowable by the AO.
Conclusion- Hon’ble high court held that since computer software has been defined in Appendix as any computer program recorded on disc, tape or other information storage device, it has to be identified accordingly and the description could not be ignored. Therefore irrespective of the usage of the software, the Hon’ble high court held that as long as it fell within the definition provided in the appendix it qualified as computer software for enhanced rate of depreciation of 60%. The ITAT, Ahmedabad Bench, in the case of Voltamp Transformers Ltd. (supra) has also categorically held that Income Tax Rules providing for rate of depreciation makes no distinction between the system software and application 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. We see, therefore, 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.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
