TaxTMI 
TaxTMI 
TaxTMI 
2022 (4) TMI 1182
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....ring of fertilizer chemicals and paints. It filed its return of income on 31st October, 2017 at a loss of Rs. 1,84,26,369/- under normal provisions and at a book profit of Rs. 6,40,71,301/- under section 115JB of the Act. The return of income was selected for scrutiny and assessment order under section 143(3) of the Act was passed on 22nd December, 2019 determining the total income of the assessee at Rs. 2,44,00,300/-. 03. Only dispute involved in this appeal is, whether the depreciation is allowable to the assessee on software ERP SAP at the rate of 60% as claimed by the assessee considering the same as computer or @ 25% as claimed by the learned assessing officer considering the software as intangible asset. The disallowance of depreciat....
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....is like system software. He therefore held that the software purchased by the assessee is application software and assessee holds only the license to use the same. He therefore held that software ERP SAP is not an integral part of the computer and therefore is an intangible asset license to the assessee and therefore, assessee is entitled to depreciation at the rate of 25% only. Accordingly, the disallowance of Rs. 3,84,70,669/- was confirmed. 06. The learned AR referred to the depreciation Schedule as New Appendix-I and submitted that in Part-A (tangible assets), serial no. 5 of plant and machinery, where 'computers including the computer software' are eligible for depreciation at the rate of 60%. He further referred to note No. 7 where c....
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....itted that the software purchased by the assessee is not a 'system software' but 'application software' and only license to use of that software is available. The assessee has acquired only intangible asset. Therefore, the assessee is eligible for deprecation at the rate of 25%. 08. We have carefully considered the rival contentions and judicial precedents cited before us. We have also considered the decision of the lower authorities. The issue involved in this appeal is where the assessee has purchased license of ERP SAP, assessee is entitled to the deprecation at the rate of 60 % as covered in New Appendix I of Rule 5 of ITAT Rules in heading of machinery and plant in part A of tangible assets at serial number 5 "computers including comp....
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....are and is eligible for deprecation at the rate of 60%. The honourable court held as Under:- 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 asse....
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....Ltd. Vs. State of Tamil Nadu [reported in (1991) 80 STC 167] and held as hereunder : "9. The Hon'ble Division Bench took note of the decision of the Hon'ble Supreme Court pointing out that the 'entry' to be interpreted is in a taxing statute; full effect should be given to all words used therein and if a particular article would fall within a description, by the force of words used, it is impermissible to ignore the description, and denote the article under another entry, by a process of reasoning. 10. It was further pointed out that the rule of construction by reference to contemporanea expositio is a well-established rule for interpreting a statute by reference to the exposition it has received from contemporary author....