2019 (7) TMI 1496

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.... under s. 143(3) of the Income Tax Act, 1961 (the Act) concerning A.Y. 2013-14. 2. The substantive grounds of appeal of the assessee reads as under:- "1. The Ld. Commissioner (Appeal) erred in fact and in law in confirming the disallowance of employees' contribution of PF and ESI of Rs. 2,93,473/- u/s. 2(24)(x) r.w.s. 36(1)(va) of the Income Tax Act, 1961 on the ground that the payment of the said contribution was made after due date as provided in respective statute. 2. The Ld. Commissioner (Appeal) erred in fact in law by confirming the disallowance of provision for maintenance and free service/warranty of Rs. 8,59,094/- in computation of book profit u/s. 115JB." 793/Ahd/2017(A.Y. 2013-14)(Assessee's Appeal):....

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....nder clause (c) to explanation 1 to section 115JB. Thus, we find merit in the grievance of the assessee on this score. Ground No. 2 of the assessee's appeal as noted above is allowed. 6. In the result, assessee's appeal is partly allowed. 795/Ahd/2017 (A.Y. 2013-14)(Revenue's Appeal):- 7. We shall now turn to Revenue's appeal in 795/Ahd/2017. The substantive grounds in Revenue's appeal reads as under:- "1) "Whether the Ld. CIT(A) is right in law and on facts in deleting the disallowance of depreciation claimed on trademark of Rs. 65,88,665/-." 2) "Whether the Ld. CIT(A) is right in law and on facts in allowing the depreciation at the rate of 60% on software being customized license product under consideratio....

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....n the case of DCIT vs. TGB Banquets & Hotels Ltd. Tax Appeal No. 470 of 2012 dated 21.06.2016 (Guj.) and also the decision of Hon'ble Supreme Court in the case of Smiffs Securities Ltd. supra. Therefore, we find no infirmity in the conclusion drawn by the CIT(A) in favour of the assessee. Hence, we decline to interfere. 11. The second issue concerns claim of depreciation at the rate of 60% on software being customized license product. The CIT(A) has dealt with the issue as under:- "7. Ground No.4 is against the allowance of depreciation @ 25% on computer software instead of prescribed rate of 60% in Appendix to Income Tax Rules 1962. I have considered the facts of the case as stated by the appellant as well as the AO in....

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....nd the application software. The schedule only provides the depreciation @60% on the computer software and the term 'computer software' has a/so been denied in the Appendix-I, The classification made by the Accounting Standards cannot overwrite the definition given in the Income Tax Act. Accordingly, the appellant is entitled to depreciation @60%. The grounds of appeal are accordingly allowed. " Moreover, Hon'ble Mumbai special bench in its order of Data Craft India Ltd. (supra) highlighted the fad that term 'computer' has not been defined under the IT Act nor in the general clauses Act, 1987, the meaning of the term computer has to be understood by applying the principles of statutory interpretation i.e. one has to....

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....a Ltd. and the case law referred by the appellant, the claim of depreciation @ 60% by the appellant is allowable. I do not find any reason to differ with findings of Hon'ble 1TAT, Ahmedabad and Mumbai in above mentioned cases. Neither (he Income Tax Act nor the judicial pronouncement differentiate between the computer and computer software and license to use the same. The list of tangible assets in the table of rate of depreciation at serial no.5 name of the asset is "computers including computer software'. The meaning of computer software is also given in note no.7 given below the table of rate of depreciation. According to this note the 'computer software' means any computer programme recorded on any disk, tap, perforated ....