ACIT, AAYAKAR BHAWAN CHURCH GATE V. SBICAP SECURITIES LIMITED, MUMBAI

ITA 5076/MUM/2024

AI Insights

The case involves an appeal by the revenue against the order of the CIT(A) which allowed SBICAP Securities Limited to claim depreciation at 60% on computer software for the Assessment Year 2014-15. The Assessing Officer (AO) had initially allowed only 25% depreciation, classifying the software as an intangible asset. However, the CIT(A) reversed this decision, supporting the assessee's claim based on a precedent and the specific provisions of the depreciation schedule. The tribunal, after reviewing the submissions and the relevant depreciation schedule, agreed with the CIT(A) and dismissed the revenue's appeal.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 470629 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2024
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 25-11-2024
• Assessment Year: misc
• Appeal Filed On: 28-09-2024
• Other Referred Cases: R K Mark Chemicals India Private Limited vs. ITA No. 1032/Mum/2021
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURESH GAIKWAD
• Keywords: Depreciation

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “G”, MUMBAI BEFORE SHRI NARENDRA KUMAR BILLAIYA, ACCOUNTANT MEMBER AND SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER ITA No.5076/M/2024 Assessment Year: 2014 ACIT Room No. 640, Aayakar Bhawan, Churchgate, Mumbai - 400020 Vs. SBICAP Securities Limited 191, Maker Tower, Cuffe Parade Mumbai – 400005 PAN: AAJCS3407M (Appellant) (Respondent) Present for: Assessee by : None Revenue by : Shri Suresh Gaikwad, Sr.DR Date of Hearing : 25.11.2024 Date of Pronouncement : 25.11.2024 O R D E R Per : Narendra Kumar Billaiya, Accountant Member: This appeal by the revenue is preferred against the order of the CIT(A) - Addl/JCIT(A) 3 – Delhi, dated 31/07/2024 pertaining to Assessment Year 2014-15. 2. The grievance of the revenue read as under: “1. Whether on the facts and circumstances of the case and in law, the CIT(A) was right in deleting the addition of Rs.6,14,89,096/-made by the AO? ITA No.5076/M/2024 SBICAP Securities Limited 2 2. Whether on the facts and circumstances of the case and in law, the CIT(A) was right in holding that the software license twill fall under Entry 5 of. Part A of New Appendix I for computers including software when the AO had clearly brought out that the assessee had right to use software license till the period of agreement and payment of license fee making it as intangible assets? 3. The appellant craves leave to add, amend, alter and/or vary any of the grounds of appeal before or at the time of hearing” 3. None appeared on behalf of the assessee in spite of notice therefore, we decided to proceed ex-parte. 4. The DR was heard at length and case records carefully perused. 5. Briefly stated the facts of the case are that during the course of the scrutiny assessment proceedings the AO noticed that the assessee has claimed depreciation at the rate of 60% on computer software. The AO was of the opinion that the assessee is eligible for depreciation at the rate of 25%. Accordingly, the AO asked the assessee to justify its claim of the depreciation at the rate of 60%. 6. In its reply the assessee explained that it has purchased the license to use the software for the purposes of its business. 7. The reply of the assessee did not find any favor with the AO who was of the firm belief that the assessee is eligible only for depreciation at the rate of 25% and accordingly, disallowed the balance. 8. Assessee carried the matter before the CIT(A) and reiterated its claim of depreciation at the rate of 60%. ITA No.5076/M/2024 SBICAP Securities Limited 3 9. After considering the facts and the submissions the CIT(A) was convinced with the claim and drawing support from the decision of coordinate bench in the case of R K Mark Chemicals India Private Limited in ITA No. 1032/Mum/2021 order dated 22/04/2022 allowed the claim of depreciation at the rate of 60%. 10. Before us the DR strongly supported the findings of the AO. We have carefully considered the orders of the authority below. We find that the depreciation schedule provides separate rates of depreciation for computer with Softwares and intangible assets. The schedule provides depreciation on computers including computer software at the rate of 60%. Computer Software has not been further bifurcated which means that any software whether imbibed in the computer or not but used with the computer is eligible for depreciation at the rate of 60%. As the assessee is engaged in the business of providing share and stock broker services, financial product distribution services and depositary participant services, it purchased the license to use the software and as per the agreement the said product was installed in its computers and was used for trading applications. We are of the considered view that the impugned software is eligible for depreciation at the rate of 60%. Therefore, we do not find any reason to interfere with the findings of the CIT(A) appeal of the revenue is accordingly dismissed. ITA No.5076/M/2024 SBICAP Securities Limited 4 11. In the result, the appeal of the revenue is dismissed. Order pronounced in the open court on 25.11.2024. Sd/- Sd/- (RAHUL CHAUDHARY) (NARENDRA KUMAR BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER Poonam Mirashi, Stenographer Copy to: The Appellant The Respondent The Pr. CIT, Concerned, Mumbai The DR Concerned Bench //True Copy// By Order Dy/Asstt. Registrar, ITAT, Mumbai. "