Generate professional replies to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
Step 1 – Issue Identification & Review
The AI analyses your query, notice, order, or uploaded documents and identifies the key issues involved.
• Review the issues identified by the AI • Add, edit, remove, or refine issues as required
Step 2 – Draft Generation
Once you approve the issues, the AI performs issue-wise legal research and prepares a structured draft response.
• Relevant statutory provisions • Judicial precedents and Supreme Court, High Court and other citations • Issue-wise legal analysis • Practical arguments and supporting content • Professionally structured draft ready for further review.
High Court allows depreciation on computer software, rejects disallowance of business dev expenses. Assessing Officer cannot question expediency. The High Court ruled in favor of the appellant in a case concerning depreciation disallowance on computer software and disallowance of business ...
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
High Court allows depreciation on computer software, rejects disallowance of business dev expenses. Assessing Officer cannot question expediency.
The High Court ruled in favor of the appellant in a case concerning depreciation disallowance on computer software and disallowance of business development expenses for the assessment year 2012-2013. The Court held that the reason for withholding payment due to lack of software update was insufficient to disallow depreciation, as the existing version could still be used. Additionally, the Court emphasized that the Assessing Officer cannot question the expediency of expenditure, only its genuineness, and allowed the appeal, deciding in favor of the assessee and against the revenue without costs.
Issues: 1) Depreciation disallowance on computer software. 2) Disallowance of business development expenses.
Depreciation Disallowance on Computer Software: The appeal challenged the disallowance of depreciation on software and business development expenses for the assessment year 2012-2013. The AO, CIT(A), and ITAT had upheld the disallowances. The supplier's letter stating non-receipt of payment for software update was cited as the reason for disallowance. The appellant argued that the software was not updated by the supplier, justifying the non-payment. The High Court noted that the duration of software use was less than 180 days, entitling only 30% depreciation. The Court held that the reason for withholding payment due to lack of software update was insufficient to disallow depreciation, as the engineer could use the existing version until updated.
Disallowance of Business Development Expenses: Regarding the disallowed business development expenses, the AO rejected the expenditure citing lack of business expediency explanation. The appellant argued that the AO cannot question the expediency of expenditure, only its genuineness. Citing the S.A.Builders case, the Court emphasized that the AO cannot decide what expenditure is expedient for the business. The Court held that the genuineness of vouchers was not in dispute, and the appellant had the right to decide the expediency of expenses to promote the business. Consequently, the Court allowed the appeal, answering substantial questions of law in favor of the assessee and against the revenue, disposing of the appeal without costs.
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