OGILY AND MATHER P. LTD., MUMBAI V. THE ASST. CIT -8(2)(1), MUMBAI

ITA 1325/MUM/2021

AI Insights

The case involves multiple appeals and cross objections by M/s Ogilvy and Mather Pvt. Ltd. and the DCIT concerning the assessment years 2012-13, 2013-14, and 2016-17. The primary issues revolved around the eligibility of education cess as a deductible expense, the appropriate rate of depreciation for computer software, and the refund of excess dividend distribution tax paid. The Tribunal consolidated the hearings for convenience and addressed the legal interpretations of the Income Tax Act concerning these issues.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123259 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 09-05-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 21-07-2021
• Other Referred Cases: Amway India Enterprises vs. DCIT, TCS vs. Commissioner of Income Tax, Chambal Fertilizers and Chemicals Ltd vs. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: AJIT SHAHHETAL SANGANI
• Keywords: Depreciation; Double taxation relief; Tax effect; Retrospective amendment; Question of law; Tax effect
• Section: 37; 90; 143(3); 72; 119

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “C” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI NARENDER KUMAR CHOUDHRY (JUDICIAL MEMBER) ITA Nos. 1637 & 1638/MUM/2021 Assessment Years: 2012-13 & 2013-14 DCIT, Circle-8(2)(1), Room No. 624, 6 th floor, Aayakar Bhavan, M.K. Road, Mumbai-400020. Vs. M/s Ogilvy and Mather Pvt. Ltd., 14 th Floor Commerz, International Business Park, Off. Express Highway Goregaon (E)- 400063. PAN No. AAACO 0427 A Appellant Respondent ITA Nos. 1324 to 1326/MUM/2021 Assessment Years: 2012-13, 2013-14 & 2016-17 M/s Ogilvy and Mather Pvt. Ltd., 5 th floor, The ORB, Village Marol, Andheri (East), Mumbai-400099. Vs. The Dy. CIT-7(3)(1) (now assessed with Asst. CIT- 8(2)(1), Aayakar Bhavan, M.K. Road, Mumbai-400020. PAN No. AAACO 0427 A Appellant Respondent CO. Nos. 38 & 39/MUM/2022 (Arising out of ITA Nos. 1637 & 1638/MUM/2021) Assessment Years: 2012-13 & 2013-14 M/s Ogilvy and Mather Pvt. Ltd., 5 th floor, The ORB, Village Marol, Andheri (East), Mumbai-400099. Vs. DCIT, Circle-8(2)(1), Room No. 624, 6 th floor, Aayakar Bhavan, M.K. Road, Mumbai-400020. PAN No. AAACO 0427 A Appellant Respondent Assessee by : Mr. Ajit Shah/Hetal Sangani Revenue by Date of Hearing Date of pronouncement PER BENCH: These cross appeals and cross objections are directed against separate orders passed by the Ld. Commissioner of Income (Appeals) for assessment year 2012 respectively. The facts and circumstances in these appeals cross objections being disposed off by way of this consolidated order for convenience and avoid repetition of facts. 2. Firstly, we take up Revenue and cross objections of the assessee for assessment year 2012-13. The relevant grounds raised in cross appeals and cross objections are reproduced as under: Assessee’s Ground 1. Claim of Education Cess In the facts and circumstances of the case, and in Law the Learned Assessing Officer (AO) /Commissioner of Income Tax (Appeals) ought to have allowed the deduction for Education Cess of Rs. 1,04,06,747/- (inadvertently mentioned as Rs 37 and other applicable provisions of the Income Tax Act, 1961 (the Act). M/s Ogilvy and Mather Pvt. Ltd. ITA Nos. No. 1637 & 1638/M/2021 &Ors. by : Mr. M P Ahuja, DR Date of Hearing : 10/05/2023 Date of pronouncement : 29/05/2023 ORDER These cross appeals and cross objections are directed against separate orders passed by the Ld. Commissioner of Income (Appeals) for assessment year 2012-13, 2013-14 respectively. The facts and circumstances in these appeals being identical, samewere heard together and disposed off by way of this consolidated order for convenience and avoid repetition of facts. Firstly, we take up the cross appeals of the assessee and Revenue and cross objections of the assessee for assessment year 13. The relevant grounds raised in cross appeals and cross objections are reproduced as under: Claim of Education Cess of Rs. 1,04,06,747/- In the facts and circumstances of the case, and in Law the Learned Assessing Officer (AO) /Commissioner of Income Tax (Appeals) ought to have allowed the deduction for Education Cess of Rs. (inadvertently mentioned as Rs.as expenditure u/s 37 and other applicable provisions of the Income Tax Act, 1961 (the M/s Ogilvy and Mather Pvt. Ltd. 2 ITA Nos. No. 1637 & 1638/M/2021 &Ors. These cross appeals and cross objections are directed against separate orders passed by the Ld. Commissioner of Income- 14 and 2016-17 respectively. The facts and circumstances in these appeals and heard together and disposed off by way of this consolidated order for convenience and the cross appeals of the assessee and Revenue and cross objections of the assessee for assessment year 13. The relevant grounds raised in cross appeals and cross In the facts and circumstances of the case, and in Law the Learned Assessing Officer (AO) /Commissioner of Income Tax (Appeals) ought to have allowed the deduction for Education Cess of Rs. as expenditure u/s 37 and other applicable provisions of the Income Tax Act, 1961 (the 2. Refund of Dividend Distribution Tax of Rs. 2,99,38,207/ In the facts and circumstances of the case, and in law it should be held that the dividend distribution tax paid us 115 the appellant on the dividend distributed/paid to Foreign Shareholders should be restricted to the respectiverates as pe relevant Article 10/11 Avoidance Agreement (DTAA) between India and the country of respective foreign shareholder is a resident i.e. Netherlands, United Kingdom, and Mauritius and the excess corporate dividend distribution tax paid should be held as refundable to the appellant. Note: The aforesaid ground has been raised for the first time. Since involves question of law it is humbly prayed that the same should be considered and dealt with and decided in accordance with provisions of law and merits of the claim. 3. It is humbly prayed that the or/such other reliefs as may be justified by the facts and circumstances of the case and as may meet the ends of justice should be granted. Revenue’s ground of appeal 1. Whether on the facts and circumstances of the case and in law the Ld. CIT(A) is right in holding that a computer software bought off the shelf is a tangible asset and hence eligible for depreciation at the rate of 60% . 2. Whether on facts and circumstances of the case and in law, Ld. CIT(A) erred in delegating the addition made us 154 of the Act on the ground that depreciation on software is allowable at the rate 60% or 25% is a debatable issue and hence cannot be rectified. 3. Whether on facts and circumstance of the case and in law, the Ld. CIT(A) erred in holding that the Assessing Officer is not justified in making rectification on a substantive issue. Cross Objections raised by the Assessee 1. In the facts and circumstances of th M/s Ogilvy and Mather Pvt. Ltd. ITA Nos. No. 1637 & 1638/M/2021 &Ors. Refund of Dividend Distribution Tax of Rs. 2,99,38,207/ In the facts and circumstances of the case, and in law it should be held that the dividend distribution tax paid us 115-0 of the Act by the appellant on the dividend distributed/paid to Foreign Shareholders should be restricted to the respectiverates as pe relevant Article 10/11 -"Dividends" of the Double Taxation Avoidance Agreement (DTAA) between India and the country of respective foreign shareholder is a resident i.e. Netherlands, United Kingdom, and Mauritius and the excess corporate dividend tion tax paid should be held as refundable to the appellant. The aforesaid ground has been raised for the first time. Since involves question of law it is humbly prayed that the same should be considered and dealt with and decided in accordance with provisions of law and merits of the claim. It is humbly prayed that the reliefs as prayed for hereinabove and or/such other reliefs as may be justified by the facts and circumstances of the case and as may meet the ends of justice should be granted. Revenue’s ground of appeal Whether on the facts and circumstances of the case and in law the Ld. CIT(A) is right in holding that a computer software bought off the shelf is a tangible asset and hence eligible for depreciation at the rate of 60% . on facts and circumstances of the case and in law, Ld. CIT(A) erred in delegating the addition made us 154 of the Act on the ground that depreciation on software is allowable at the rate 60% or 25% is a debatable issue and hence cannot r on facts and circumstance of the case and in law, the Ld. CIT(A) erred in holding that the Assessing Officer is not justified in making rectification on a substantive issue. Cross Objections raised by the Assessee In the facts and circumstances of the case and in law: M/s Ogilvy and Mather Pvt. Ltd. 3 ITA Nos. No. 1637 & 1638/M/2021 &Ors. Refund of Dividend Distribution Tax of Rs. 2,99,38,207/- In the facts and circumstances of the case, and in law it should be 0 of the Act by the appellant on the dividend distributed/paid to Foreign Shareholders should be restricted to the respectiverates as per "Dividends" of the Double Taxation Avoidance Agreement (DTAA) between India and the country of respective foreign shareholder is a resident i.e. Netherlands, United Kingdom, and Mauritius and the excess corporate dividend tion tax paid should be held as refundable to the appellant. The aforesaid ground has been raised for the first time. Since involves question of law it is humbly prayed that the same should be considered and dealt with and decided in accordance with the as prayed for hereinabove and or/such other reliefs as may be justified by the facts and circumstances of the case and as may meet the ends of justice Whether on the facts and circumstances of the case and in law the Ld. CIT(A) is right in holding that a computer software bought off the shelf is a tangible asset and hence eligible for on facts and circumstances of the case and in law, Ld. CIT(A) erred in delegating the addition made us 154 of the Act on the ground that depreciation on software is allowable at the rate 60% or 25% is a debatable issue and hence cannot r on facts and circumstance of the case and in law, the Ld. CIT(A) erred in holding that the Assessing Officer is not justified in making rectification on a substantive issue. e case and in law: (a) The Ld. CIT(A) rightly held that off the shelf computer software bought were tangible assets and eligible for depreciation @ 60%. (b) The Ld. CIT(A) rightly held as to whether computer software is eligible for depreciation @ 60% or 2 hence allowance of depreciation at 60% could not be construed as a mistake apparent from record which could be rectified us. 154 of the Act. (c) The Ld. CIT (A) did not err in holding that the Assessing Officer was not justified in passing the order of rectification us. 154 of the Act involving substantive issue as to whether the correct rate of depreciation in respect of software is 60% or 25%. (d)The Appellate Order passed by the Ld. CIT (A) should be upheld wherein he has held depreciation @ 60%. 1.1 Without prejudice to each of the earlier Cross Objections, in the facts and circumstances of the case and in law the appeal filed by the Department for impugned assessment year 2012 dismissed as the tax effect mentioned in the Form 36 filed al with the Grounds of Appeal is Rs.19,53,430/ 50 lakhs as per the InstructionsNo. 17/2019 dated 08/08/2019 issued by the Central Board of Direct Taxes as regards the appeal by the Department. 2. It is humbly prayed that the relief such other reliefs as may be justified by the facts and circumstances of the case and as may meet the ends of justice should be granted. 3. Briefly stated, facts of the case are that the assessee was engaged in the business of advertising. The assessee f original return of income on 20.11.2012 declaring total income at Rs.109,55,38,640/-, w Rs.110,12,43,050/- on 26.03.2014. purpose of the income tax, the assessee claimed depreciation on software expenses at the rate of the 60% of written down return of income filed by the assessee was selected for scrutiny M/s Ogilvy and Mather Pvt. Ltd. ITA Nos. No. 1637 & 1638/M/2021 &Ors. (a) The Ld. CIT(A) rightly held that off the shelf computer software bought were tangible assets and eligible for depreciation @ 60%. (b) The Ld. CIT(A) rightly held as to whether computer software is eligible for depreciation @ 60% or 25% is a debatable issue and hence allowance of depreciation at 60% could not be construed as a mistake apparent from record which could be rectified us. 154 of the (c) The Ld. CIT (A) did not err in holding that the Assessing Officer in passing the order of rectification us. 154 of the Act involving substantive issue as to whether the correct rate of depreciation in respect of software is 60% or 25%. (d)The Appellate Order passed by the Ld. CIT (A) should be upheld wherein he has held that computer software are eligible for depreciation @ 60%. Without prejudice to each of the earlier Cross Objections, in the facts and circumstances of the case and in law the appeal filed by the Department for impugned assessment year 2012-13 should be dismissed as the tax effect mentioned in the Form 36 filed al with the Grounds of Appeal is Rs.19,53,430/- which is less than Rs. 50 lakhs as per the InstructionsNo. 17/2019 dated 08/08/2019 issued by the Central Board of Direct Taxes as regards the appeal by the Department. It is humbly prayed that the reliefs prayed for hereinabove and/or such other reliefs as may be justified by the facts and circumstances of the case and as may meet the ends of justice should be granted. Briefly stated, facts of the case are that the assessee was engaged in the business of advertising. The assessee f original return of income on 20.11.2012 declaring total income at , which was subsequently revised to on 26.03.2014. In the return of income, fo purpose of the income tax, the assessee claimed depreciation on software expenses at the rate of the 60% of written down return of income filed by the assessee was selected for scrutiny M/s Ogilvy and Mather Pvt. Ltd. 4 ITA Nos. No. 1637 & 1638/M/2021 &Ors. (a) The Ld. CIT(A) rightly held that off the shelf computer software bought were tangible assets and eligible for depreciation @ 60%. (b) The Ld. CIT(A) rightly held as to whether computer software is 5% is a debatable issue and hence allowance of depreciation at 60% could not be construed as a mistake apparent from record which could be rectified us. 154 of the (c) The Ld. CIT (A) did not err in holding that the Assessing Officer in passing the order of rectification us. 154 of the Act involving substantive issue as to whether the correct rate of (d)The Appellate Order passed by the Ld. CIT (A) should be upheld that computer software are eligible for Without prejudice to each of the earlier Cross Objections, in the facts and circumstances of the case and in law the appeal filed by 13 should be dismissed as the tax effect mentioned in the Form 36 filed along which is less than Rs. 50 lakhs as per the InstructionsNo. 17/2019 dated 08/08/2019 issued by the Central Board of Direct Taxes as regards the appeal s prayed for hereinabove and/or such other reliefs as may be justified by the facts and circumstances of the case and as may meet the ends of justice should be granted. Briefly stated, facts of the case are that the assessee company was engaged in the business of advertising. The assessee filed its original return of income on 20.11.2012 declaring total income at hich was subsequently revised to In the return of income, for the purpose of the income tax, the assessee claimed depreciation on software expenses at the rate of the 60% of written down value.The return of income filed by the assessee was selected for scrutiny and statutory notices under the Act were issued and co assessment u/s 143(3) of the Act was completed on 26.03.2016. the assessment completed the claim of depreciation on software was allowed. However, subsequently the Assessing Officer noted that the assessee should have been allowed depre 25% instead of 60% claimed by the assessee rectification order passed under section 154 of the 30/03/2019, the Assessing Officer withdrawn the depreciation amounting to Ld. CIT(A)held that, firstly rectification on a substantive issue and secondly entitled for depreciation 01/04/2003. Before the Ld. CIT( additional ground claiming deduction for education cess, which dismissed by the Ld. CIT(A). Aggrieved, both of the assessee are before the grounds. 4. We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. 4.1 As far as ground No. 1 of the appeal of the assessee is concerned, we find that the Ld. CIT(A) relying on the decision of the Hon’ble Supreme Court in the case of tax vs K Srinivasan ( finance bill of 2004, held that M/s Ogilvy and Mather Pvt. Ltd. ITA Nos. No. 1637 & 1638/M/2021 &Ors. statutory notices under the Act were issued and complied with. The assessment u/s 143(3) of the Act was completed on 26.03.2016. the assessment completed the claim of depreciation on software was allowed. However, subsequently the Assessing Officer noted that the assessee should have been allowed depreciation only at the rate of 25% instead of 60% claimed by the assessee. Accordingly rectification order passed under section 154 of the 30/03/2019, the Assessing Officer withdrawn the depreciation amounting to ₹ 58, 60, 877/-. On furt , firstly, the Assessing Officer was not justified in rectification on a substantive issue and secondly, the assessee to be entitled for depreciation at the rate of the 60% with effect from Before the Ld. CIT(A), the assessee also raised additional ground claiming deduction for education cess, which dismissed by the Ld. CIT(A). Aggrieved, both of the R assessee are before the Tribunal by way of raising respective We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. As far as ground No. 1 of the appeal of the assessee is , we find that the Ld. CIT(A) relying on the decision of the preme Court in the case of Commissioner of Income Srinivasan (1972) 83 ITR 346read with memorandum to , held thateducation cess is ultimately a part of M/s Ogilvy and Mather Pvt. Ltd. 5 ITA Nos. No. 1637 & 1638/M/2021 &Ors. mplied with. The assessment u/s 143(3) of the Act was completed on 26.03.2016. In the assessment completed the claim of depreciation on software was allowed. However, subsequently the Assessing Officer noted that the ciation only at the rate of ccordingly, in the rectification order passed under section 154 of the Act on 30/03/2019, the Assessing Officer withdrawn the excess On further appeal, the , the Assessing Officer was not justified in the assessee to be the rate of the 60% with effect from A), the assessee also raised additional ground claiming deduction for education cess, which was Revenue and the ribunal by way of raising respective We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. As far as ground No. 1 of the appeal of the assessee is , we find that the Ld. CIT(A) relying on the decision of the Commissioner of Income- read with memorandum to education cess is ultimately a part of the Income-tax and hence not Parliament has amended the section 40(a)(ii) of the Finance act ,2022 and an Explanation effect from 01/04/2005, which reads as under: “(ii) any sum paid on account of any rate or tax levied on the profits or gains of any busines at a proposition of, or otherwise on the basis of, any such profits or gains. [Explanation 1. declared that for the purposes of this sub paid on account of any rate or ta be deemed always to have included any sum eligible for relief of tax under section 90 or, as the case may be, deduction from the Indian Income 91.] [Explanation 2. declared that for the purpose of this sub paid on account of any rate or tax levied includes any sum eligible for relief of tax under section 90A.] [Explanation 3. hereby clarified that for the purpose clause, the term “tax” shall include and shall be deemed to have always included any surcharge or cess, by whatever name called, on such tax; 4.2 In view ofabove education cess was not pressed before us by the learne the assessee. 4.3 Further, we note that case of CIT Vs Chambal No. 7379 /2019 has M/s Ogilvy and Mather Pvt. Ltd. ITA Nos. No. 1637 & 1638/M/2021 &Ors. tax and hence not allowable. We find that Hon’ble amended the section 40(a)(ii) of the Finance act ,2022 and an Explanation-3 has been introduced with effect from 01/04/2005, which reads as under: any sum paid on account of any rate or tax levied on the profits or gains of any business or profession or assessed at a proposition of, or otherwise on the basis of, any such profits or gains. [Explanation 1. – For the removal of doubts, it is hereby declared that for the purposes of this sub-clause, any sum paid on account of any rate or tax levied includes and shall be deemed always to have included any sum eligible for relief of tax under section 90 or, as the case may be, deduction from the Indian Income-tax payable under section [Explanation 2. – For the removal of doubts, it is her declared that for the purpose of this sub-clause, paid on account of any rate or tax levied includes any sum eligible for relief of tax under section 90A.] [Explanation 3. – For the removal of doubts, it is hereby clarified that for the purposes of this sub clause, the term “tax” shall include and shall be deemed to have always included any surcharge or cess, by whatever name called, on such tax;]” above retrospective amendment, was not pressed before us by the learne we note that the Hon’ble Supreme Court in the Chambal Fertilizersand chemicals Ltd in SLP© has upheld the retrospective amendment M/s Ogilvy and Mather Pvt. Ltd. 6 ITA Nos. No. 1637 & 1638/M/2021 &Ors. We find that Hon’ble amended the section 40(a)(ii) of the Act by way of 3 has been introduced with any sum paid on account of any rate or tax levied on s or profession or assessed at a proposition of, or otherwise on the basis of, any such For the removal of doubts, it is hereby clause, any sum x levied includes and shall be deemed always to have included any sum eligible for relief of tax under section 90 or, as the case may be, tax payable under section For the removal of doubts, it is hereby clause, any sum paid on account of any rate or tax levied includes any sum For the removal of doubts, it is s of this sub- clause, the term “tax” shall include and shall be deemed to have always included any surcharge or ” the claim of was not pressed before us by the learned Counsel of eme Court in the sand chemicals Ltd in SLP© upheld the retrospective amendment and confirmed that education cess is not allowable deduction. The relevant finding of the Hon’ble Supreme Court is reproduced as under: “Learned senior advocate appearing on behalf of the respondent-assessee states that in view of the amendment vide the Finance Act, 2022 to Section 40(a) (ii) of the Income Tax Act, 1961, the present appeal has to be allowed. In view of the statement made, we direct that the Education cess paid by the respondent an expenditure under Section 37 read with 40 (a) (ii) of the Income Tax Act, 1961. Learned senior advocate appearing on behalf of the respondent paid the applicable tax on the disallowance. Recording the above, the appeal terms, without any order as to costs.” 4.4 Respectfully, in Supreme Court of Cham appeal of the assessee is dismissed. 5.1 The ground No. 2 of t additional ground, Rs.2,99,38,207/-. This ground was admitted as additional ground M/s Ogilvy and Mather Pvt. Ltd. ITA Nos. No. 1637 & 1638/M/2021 &Ors. hat education cess is not allowable deduction. The relevant finding of the Hon’ble Supreme Court is reproduced as “Learned senior advocate appearing on behalf of the assessee states that in view of the amendment vide the Finance Act, 2022 with retrospective effect from 01.04.2005 to Section 40(a) (ii) of the Income Tax Act, 1961, the present appeal has to be allowed. In view of the statement made, we direct that the Education cess paid by the respondent-assessee would not be allowed as expenditure under Section 37 read with 40 (a) (ii) of the Income Tax Act, 1961. Learned senior advocate appearing on behalf of the respondent-assessee states that they have also paid the applicable tax on the disallowance. Recording the above, the appeal is allowed in the aforesaid terms, without any order as to costs.” Respectfully, in view of decision in the case of Hon’ble Supreme Court of Chambal Fertilizer (supra), the ground appeal of the assessee is dismissed. ground No. 2 of the appeal, which is ground, relates to dividend distribution of tax of This ground was admitted as additional ground M/s Ogilvy and Mather Pvt. Ltd. 7 ITA Nos. No. 1637 & 1638/M/2021 &Ors. hat education cess is not allowable deduction. The relevant finding of the Hon’ble Supreme Court is reproduced as “Learned senior advocate appearing on behalf of the assessee states that in view of the amendment vide with retrospective effect from 01.04.2005 to Section 40(a) (ii) of the Income Tax Act, 1961, the present In view of the statement made, we direct that the Education assessee would not be allowed as expenditure under Section 37 read with 40 (a) (ii) of the Income Tax Act, 1961. Learned senior advocate appearing on assessee states that they have also is allowed in the aforesaid view of decision in the case of Hon’ble the ground No. 1 of is raised as an relates to dividend distribution of tax of This ground was admitted as additional ground in view of the settled principle of law being purely legal and no investigation of the ground, the Ld. Counsel of the assessee relied on the following decisions: 1. Asst. CIT v. Saurashtra Kutch Stock Exchange Ltd. (2008) 219 CTR 90 (SC) 2. Asst. Commissioner of Income tax Mumbai v. I (Mum) 3. National Collateral Management Services P. Ltd. v. Addl. CIT Rg. 7(1) Mumbai (ITA No. 2237/Mum/2013) 4. Arkema Chemicals India P. Ltd. v. ACIT (2022) ITA No. 1032/Mum/2021 (Mum Trib.) 5. Computer Age Management Services (P.) Ltd. [2019] 109 taxmann.com 134 (Madras High Court) 5.2 The Ld. Counsel however fairly accepted that the Tribunal Special Bench in the case of Ltd in ITA No. 6997/Mum/2019 for AY 2016 dividend distribution tax on domestic companies has to be levied as per the provisions of the Income can be allowed. The relevant finding of the special bench of the Tribunal (supra) is reproduced as und “CONCLUSION: 83. For the reasons give above, we hold that where dividend is declared, distributed or paid by a domestic company to a non-resident shareholder(s), which attracts Additional Income Tax (Tax on Distributed Profits) referred to in Sec.115 Act, such additional income tax payable by the domestic company shall be at the rate mentioned in Section 115 O of the Act and not at the rate of tax applicable to the non M/s Ogilvy and Mather Pvt. Ltd. ITA Nos. No. 1637 & 1638/M/2021 &Ors. in view of the settled principle of law being purely legal and no investigation of the fresh facts was required. , the Ld. Counsel of the assessee relied on the following Asst. CIT v. Saurashtra Kutch Stock Exchange Ltd. (2008) 219 CTR 90 (SC) Asst. Commissioner of Income tax Mumbai v. I-Flex Solutions Ltd. [2010] 42 SOT 7 (Mum) National Collateral Management Services P. Ltd. v. Addl. CIT Rg. 7(1) Mumbai (ITA No. 2237/Mum/2013) Arkema Chemicals India P. Ltd. v. ACIT (2022) ITA No. 1032/Mum/2021 (Mum Trib.) Computer Age Management Services (P.) Ltd. [2019] 109 taxmann.com 134 (Madras High Court) The Ld. Counsel however fairly accepted that the Tribunal Special Bench in the case of DCIT, Mumbai Vs Total Oil India P Ltd in ITA No. 6997/Mum/2019 for AY 2016-17 dividend distribution tax on domestic companies has to be levied as per the provisions of the Income-tax Act, and no benefit of the DTAA The relevant finding of the special bench of the Tribunal (supra) is reproduced as under: CONCLUSION: 83. For the reasons give above, we hold that where dividend is declared, distributed or paid by a domestic company to a resident shareholder(s), which attracts Additional Income Tax (Tax on Distributed Profits) referred to in Sec.115 Act, such additional income tax payable by the domestic company shall be at the rate mentioned in Section 115 O of the Act and not at the rate of tax applicable to the non M/s Ogilvy and Mather Pvt. Ltd. 8 ITA Nos. No. 1637 & 1638/M/2021 &Ors. in view of the settled principle of law being purely legal in nature required. In support of , the Ld. Counsel of the assessee relied on the following Asst. CIT v. Saurashtra Kutch Stock Exchange Ltd. Asst. Commissioner of Income tax – CC 8(2), ons Ltd. [2010] 42 SOT 7 National Collateral Management Services P. Ltd. v. Addl. CIT Rg. 7(1) Mumbai (ITA No. Arkema Chemicals India P. Ltd. v. ACIT (2022) ITA Computer Age Management Services (P.) Ltd. [2019] 109 taxmann.com 134 (Madras High Court) The Ld. Counsel however fairly accepted that the Tribunal DCIT, Mumbai Vs Total Oil India P 17has held that dividend distribution tax on domestic companies has to be levied as tax Act, and no benefit of the DTAA The relevant finding of the special bench of the 83. For the reasons give above, we hold that where dividend is declared, distributed or paid by a domestic company to a resident shareholder(s), which attracts Additional Income Tax (Tax on Distributed Profits) referred to in Sec.115-O of the Act, such additional income tax payable by the domestic company shall be at the rate mentioned in Section 115 O of the Act and not at the rate of tax applicable to the non-resident shareholder(s) as specified in the relevant DTAA with reference to conscious of the sovereign’s prerogative to extend the treaty protection to domestic companies paying dividend distribution tax through the mechanism of DTAAs. Thus, wherever the Contracting States to a tax treat protection to the domestic company paying dividend distribution tax, only then, the domestic company can claim benefit of the DTAA, if any. Thus, the question before the Special Bench is answered, accordingly. 5.3 In view of issue in dispute by the decision of the additional ground raised by the assessee is dismissed. 6. Now we take up the ground raised by the appeal. All the three rounds raised the computer software allowed by the Ld. CIT(A) written down value. The relevant finding of the Ld. CIT(A) is reproduced as under: “6.3 The first issue in the software is a tangible or intangible asset and whether the assesses get ownership right by acquiring the same. In this case the computer software is acquired off the shelf. The agreement under which software is commonl to use the computer software for their own purpose and there is as such no acquisition of any asset. The intellectual property rights in computer software is recognized and protected by the Copyright Act and as per the provisions of s. 14(b) of the said statute, the use of a computer software under a licence is not exercise of a copyright. The acquisition of computer software under licence could be considered as a purchase of a copyrighted article wherein no i property is transferred asper the Copyright Act. The ratio laid down by the Hon'ble Supreme Court in the case of TCS (2004) 271 ITR 401 (SC) holding that computer software put in a medium of disk would be goods may lead to the inference that purc acquiring a tangible asset. If the disk, tape or floppy or other M/s Ogilvy and Mather Pvt. Ltd. ITA Nos. No. 1637 & 1638/M/2021 &Ors. shareholder(s) as specified in the relevant DTAA with reference to such dividend income. Nevertheless, we are conscious of the sovereign’s prerogative to extend the treaty protection to domestic companies paying dividend distribution tax through the mechanism of DTAAs. Thus, wherever the Contracting States to a tax treaty intend to extend the treaty protection to the domestic company paying dividend distribution tax, only then, the domestic company can claim benefit of the DTAA, if any. Thus, the question before the Special Bench is answered, accordingly.” issue in dispute,beingcovered against the assessee by the decision of the special bench of the Tribunal (supra), the additional ground raised by the assessee is dismissed. Now we take up the ground raised by the appeal. All the three rounds raised are in relation to depreciation on the computer software allowed by the Ld. CIT(A) . The relevant finding of the Ld. CIT(A) is reproduced as under: 6.3 The first issue in the present case is whether the computer software is a tangible or intangible asset and whether the assesses get ownership right by acquiring the same. In this case the computer software is acquired off the shelf. The agreement under which software is commonly acquired, the assesses acquire only a licence to use the computer software for their own purpose and there is as such no acquisition of any asset. The intellectual property rights in computer software is recognized and protected by the Copyright Act as per the provisions of s. 14(b) of the said statute, the use of a computer software under a licence is not exercise of a copyright. The acquisition of computer software under licence could be considered as a purchase of a copyrighted article wherein no i property is transferred asper the Copyright Act. The ratio laid down by the Hon'ble Supreme Court in the case of TCS (2004) 271 ITR 401 (SC) holding that computer software put in a medium of disk would be goods may lead to the inference that purchase of such disk is acquiring a tangible asset. If the disk, tape or floppy or other M/s Ogilvy and Mather Pvt. Ltd. 9 ITA Nos. No. 1637 & 1638/M/2021 &Ors. shareholder(s) as specified in the relevant DTAA with such dividend income. Nevertheless, we are conscious of the sovereign’s prerogative to extend the treaty protection to domestic companies paying dividend distribution tax through the mechanism of DTAAs. Thus, wherever the y intend to extend the treaty protection to the domestic company paying dividend distribution tax, only then, the domestic company can claim benefit of the DTAA, if any. Thus, the question before the against the assessee special bench of the Tribunal (supra), the additional ground raised by the assessee is dismissed. Now we take up the ground raised by the Revenue in its in relation to depreciation on the computer software allowed by the Ld. CIT(A) @ 60% of the . The relevant finding of the Ld. CIT(A) is present case is whether the computer software is a tangible or intangible asset and whether the assesses get ownership right by acquiring the same. In this case the computer software is acquired off the shelf. The agreement under which y acquired, the assesses acquire only a licence to use the computer software for their own purpose and there is as such no acquisition of any asset. The intellectual property rights in computer software is recognized and protected by the Copyright Act as per the provisions of s. 14(b) of the said statute, the use of a computer software under a licence is not exercise of a copyright. The acquisition of computer software under licence could be considered as a purchase of a copyrighted article wherein no intangible property is transferred asper the Copyright Act. The ratio laid down by the Hon'ble Supreme Court in the case of TCS (2004) 271 ITR 401 (SC) holding that computer software put in a medium of disk would hase of such disk is acquiring a tangible asset. If the disk, tape or floppy or other electronic medium in which the software is stored is by itself goods, then the assessee who acquires the same, acquires a tangible asset. Computer software has not been d Appendix I to the IT Rules, it has been explained to include computer program recorded on any disk, tape, perforated media or other information storage device. Therefore computer software in canned form is goods and a ta Note 7 to Appendix I to the IT Rules and eligible for depreciation @ 60%. 6.4 Canned software contained in a medium are bought and sold. It is an article of value. It is sold in various forms like floppies, disk CD-ROMs, punch cards, magnetic tapes, etc. A program containing instructions in computer language is subject has its value to the buyer. It is useful to the person w use the hardware, viz., the computer in an effecti enable him to obtain the desired results. It indisputably becomes an object of trade and commerce. 'Canned software means that is not specifically created for a particular consumer. The sale or lease of, or granting a license to use, canned software is not automatic data processing and computer services, but is the sale of tangible personal property. When the software marketed is canned software being a tangible property would be exigible to sales depreciation @ 60%. 6.5 It appears the software is acquired off the shelf. These are the kind of software purchased to run the hardware. Basically, there are two types of software programs.The first is an operational program which controls the hardware and actually mak machine run; it is fundamental and necessary to the functioning of the computer hardware itself. Secondly, there is an applicational program which is a type of program designed to perform specific functions, such as preparation of the employee payro of a loan amortization schedule, or any other specific job which the computer is capable of performing. Applicational programs instruct the central processing unit of the computer to perform the fundamental computations, comparisons, and se required to take incoming information and compute the desired output. [Commerce Union Bank vs. Tidwell 538 SW. 2d 405]. The 60% rate for depreciation is stipulated for i. computer software acquired off the shelf, i M/s Ogilvy and Mather Pvt. Ltd. ITA Nos. No. 1637 & 1638/M/2021 &Ors. electronic medium in which the software is stored is by itself goods, then the assessee who acquires the same, acquires a tangible asset. Computer software has not been defined in the Act, but in Note 7 to Appendix I to the IT Rules, it has been explained to include computer program recorded on any disk, tape, perforated media or other information storage device. Therefore computer software in canned form is goods and a tangible asset by itself. These are covered in Note 7 to Appendix I to the IT Rules and eligible for depreciation @ 6.4 Canned software contained in a medium are bought and sold. It is an article of value. It is sold in various forms like floppies, disk ROMs, punch cards, magnetic tapes, etc. A program containing instructions in computer language is subject-matter of a licence. It has its value to the buyer. It is useful to the person wh use the hardware, viz., the computer in an effective manner so as to enable him to obtain the desired results. It indisputably becomes an object of trade and commerce. 'Canned software means that is not specifically created for a particular consumer. The sale or lease of, or granting a license to ned software is not automatic data processing and computer services, but is the sale of tangible personal property. When the software marketed is canned software being a tangible property would be exigible to sales-tax. These are eligible for @ 60%. 6.5 It appears the software is acquired off the shelf. These are the kind of software purchased to run the hardware. Basically, there are two types of software programs.The first is an operational program which controls the hardware and actually mak machine run; it is fundamental and necessary to the functioning of the computer hardware itself. Secondly, there is an applicational program which is a type of program designed to perform specific functions, such as preparation of the employee payroll, preparation of a loan amortization schedule, or any other specific job which the computer is capable of performing. Applicational programs instruct the central processing unit of the computer to perform the fundamental computations, comparisons, and sequential steps required to take incoming information and compute the desired output. [Commerce Union Bank vs. Tidwell 538 SW. 2d 405]. The 60% rate for depreciation is stipulated for i. computer software acquired off the shelf, if. operational software tha M/s Ogilvy and Mather Pvt. Ltd. 10 ITA Nos. No. 1637 & 1638/M/2021 &Ors. electronic medium in which the software is stored is by itself goods, then the assessee who acquires the same, acquires a tangible asset. efined in the Act, but in Note 7 to Appendix I to the IT Rules, it has been explained to include computer program recorded on any disk, tape, perforated media or other information storage device. Therefore computer software in canned ngible asset by itself. These are covered in Note 7 to Appendix I to the IT Rules and eligible for depreciation @ 6.4 Canned software contained in a medium are bought and sold. It is an article of value. It is sold in various forms like floppies, disks, ROMs, punch cards, magnetic tapes, etc. A program containing matter of a licence. It ho intends to ve manner so as to enable him to obtain the desired results. It indisputably becomes an 'Canned software means that is not specifically created for a particular consumer. The sale or lease of, or granting a license to ned software is not automatic data processing and computer services, but is the sale of tangible personal property. When the software marketed is canned software being a tangible tax. These are eligible for 6.5 It appears the software is acquired off the shelf. These are the kind of software purchased to run the hardware. Basically, there are two types of software programs.The first is an operational program which controls the hardware and actually makes the machine run; it is fundamental and necessary to the functioning of the computer hardware itself. Secondly, there is an applicational program which is a type of program designed to perform specific ll, preparation of a loan amortization schedule, or any other specific job which the computer is capable of performing. Applicational programs instruct the central processing unit of the computer to perform the quential steps required to take incoming information and compute the desired output. [Commerce Union Bank vs. Tidwell 538 SW. 2d 405]. The 60% rate for depreciation is stipulated for i. computer software . operational software that controls hardware, i. where the software is an integral part of the related hardware etc. In these cases these software which are recorded in any medium becomes tangible asset. 6.6 In the present case software purchased by the assessee for operationalpurpose. The expenditure incurred by the assessee on purchase of softwarescapital in nature. In AMWAY INDIA ENTERPRISES vs. DCIT (2008) 114 TTJ 0476(SB) : (2008) 4 DTR 0001 (SB) : (2008) 111 ITD 0112, the ITAT special bench opinedthat computer software is a t personpurchasing the disk or other medium containing the software is owner to the extent ofthe rights comprised in the license. Software contained in a disk is tangible propertyby itself. The use by the assessee of such software in his business is enough to allowthe claim for depreciation. The rights which an assessee acquires by purchasing thedisk or magnetic medium containing the computer software with limited or absoluteright to use the same by itself would satisfy the requirements of the plant. Theassessee's ownership of limited right over the tangible asset is sufficient to concludethat the assessee is the owner of the plant. With effect from 1st April, 2003, computersoftware has been classified as a tangible asset under the heading "Plant" inAppendix I to the IT Rules enti to depreciation at 60 per cent. The assesseewould be entitled to depreciation at 60 per cent from 1st April, 2003. 6.7 Further, I have found that on the identical issue for AY 2014 and 2015-16,the decision was taken by my predecessor i Commissioner of Income Tax(Appeals) assessment years, the CIT(A) held that the issueis covered in favour of the appellant by the decision of Special Bench, ITAT, Delhi inthe case of Amway India Enterprises vs. DCIT 111 ITD 112. Respectfully followingthe same, the CIT(A) has directed the Assessing Officer to allow the depreciation @60% for both the Assessment years. In the present year also, facts are identical.Hence, maintaining t consistency and also the reasons I have delineated above, itis held that the assessee is entitled for depreciation @ 60% for the computersoftware for the AY 2016 jurisdictional pronouncements: 1. Amway India Enterprises V Delhi 2. MakeMy Trip (India) Pvt Ltd Vs DCIT 6(1) ITA No. 6055/Del/2010 dated 30.07.2018. M/s Ogilvy and Mather Pvt. Ltd. ITA Nos. No. 1637 & 1638/M/2021 &Ors. hardware, i. where the software is an integral part of the related hardware etc. In these cases these software which are recorded in any medium becomes tangible asset. 6.6 In the present case software purchased by the assessee for pose. The expenditure incurred by the assessee on purchase of softwarescapital in nature. In AMWAY INDIA ENTERPRISES vs. DCIT (2008) 114 TTJ 0476(SB) : (2008) 4 DTR 0001 (SB) : (2008) 111 ITD 0112, the ITAT special bench opinedthat computer software is a tangible property. Though a licensee, the personpurchasing the disk or other medium containing the software is owner to the extent ofthe rights comprised in the license. Software contained in a disk is tangible propertyby itself. The use by the such software in his business is enough to allowthe claim for depreciation. The rights which an assessee acquires by purchasing thedisk or magnetic medium containing the computer software with limited or absoluteright to use the same by itself y the requirements of the plant. Theassessee's ownership of limited right over the tangible asset is sufficient to concludethat the assessee is the owner of the plant. With effect from 1st April, 2003, computersoftware has been classified as a tangible et under the heading "Plant" inAppendix I to the IT Rules enti to depreciation at 60 per cent. The assesseewould be entitled to depreciation at 60 per cent from 1st April, 2003. 6.7 Further, I have found that on the identical issue for AY 2014 16,the decision was taken by my predecessor i Commissioner of Income Tax(Appeals)-13, Mumbai. In both the assessment years, the CIT(A) held that the issueis covered in favour of the appellant by the decision of Special Bench, ITAT, Delhi inthe of Amway India Enterprises vs. DCIT 111 ITD 112. Respectfully followingthe same, the CIT(A) has directed the Assessing Officer to allow the depreciation @60% for both the Assessment years. In the present year also, facts are identical.Hence, maintaining t consistency and also the reasons I have delineated above, itis held that the assessee is entitled for depreciation @ 60% for the computersoftware for the AY 2016-17.I also rely on the following jurisdictional pronouncements: 1. Amway India Enterprises V/s DCIT (2008) 111 ITD 112 New 2. MakeMy Trip (India) Pvt Ltd Vs DCIT 6(1) ITA No. 6055/Del/2010 dated 30.07.2018. M/s Ogilvy and Mather Pvt. Ltd. 11 ITA Nos. No. 1637 & 1638/M/2021 &Ors. hardware, i. where the software is an integral part of the related hardware etc. In these cases these software which are recorded in 6.6 In the present case software purchased by the assessee for pose. The expenditure incurred by the assessee on purchase of softwarescapital in nature. In AMWAY INDIA ENTERPRISES vs. DCIT (2008) 114 TTJ 0476(SB) : (2008) 4 DTR 0001 (SB) : (2008) 111 ITD 0112, the ITAT special bench opinedthat angible property. Though a licensee, the personpurchasing the disk or other medium containing the software is owner to the extent ofthe rights comprised in the license. Software contained in a disk is tangible propertyby itself. The use by the such software in his business is enough to allowthe claim for depreciation. The rights which an assessee acquires by purchasing thedisk or magnetic medium containing the computer software with limited or absoluteright to use the same by itself y the requirements of the plant. Theassessee's ownership of limited right over the tangible asset is sufficient to concludethat the assessee is the owner of the plant. With effect from 1st April, 2003, computersoftware has been classified as a tangible et under the heading "Plant" inAppendix I to the IT Rules entitled to depreciation at 60 per cent. The assesseewould be entitled to 6.7 Further, I have found that on the identical issue for AY 2014-15 16,the decision was taken by my predecessor i.e., 13, Mumbai. In both the assessment years, the CIT(A) held that the issueis covered in favour of the appellant by the decision of Special Bench, ITAT, Delhi inthe of Amway India Enterprises vs. DCIT 111 ITD 112. Respectfully followingthe same, the CIT(A) has directed the Assessing Officer to allow the depreciation @60% for both the Assessment years. In the present year also, facts are identical.Hence, maintaining the consistency and also the reasons I have delineated above, itis held that the assessee is entitled for depreciation @ 60% for the 17.I also rely on the following /s DCIT (2008) 111 ITD 112 New 2. MakeMy Trip (India) Pvt Ltd Vs DCIT 6(1) ITA No. 6055/Del/2010 3. ACIT Vs Zyndus Infrastructure (P} Ltd [2016] 72 taxmann.com 199 (Ahmadabad Tribunal) 4. Ushodaya Enterprises Ltd V ACIT [2014] 149 I (Hyderabad) 5. Maruti Udyog Ltd. Vs DCIT [2005] 92 ITD 119 (Delhi) 6. National Collateral Management Services P. Ltd Vs Add CIT Rg 7(1) Mumbai (ITA No.2237/Mum/2013) 7. Sec. 154(1) of the Act confers power on the IT authorities, as enumerated insection 116 of the Act, to amend any order passed by it under the provisions of theAct. The power can be exercised, "to rectify any mistake apparent on record." Theexercise of power under s. 154(1) of the Act by the IT authorities are sub that there is a mistake apparent from the record. In Asst. CIT vs.Saurashtra Kutch Stock Exchange Ltd. (2008) 219 CTR (SC) 90, the Supreme Court, while dealing with a case arising under s. 254 of the Act, considered the scope of the wo apparent on the face of the record". The hon'ble Supreme Court held: "In our judgment, therefore, a patent, manifest and self which does not require elaborate discussion of evidence or argument to establish it, can be record and can be corrected while exercising certiorari jurisdiction. An error cannot be said to be apparent on the face of the record if one has to travel beyond the record to see whether the judgment is correct or not.An error apparent on the face of the record means an error which strikes on mere looking and does not need, long drawn out process of reasoning on points where there may conceivably be two opinions. Such error should not require any extraneous show its incorrectness. To put it differently, it should be so manifest and clear that no Court would permit it to remain on record. If the view accepted by the Court in the original judgment is one of the possible views, the case cannot be said apparent on the face of the record". (emphasis supplied) In the present case, considering facts and circumstances, I hold that the Assessing Officer is not justified in making a rectification on a substantive issue.” M/s Ogilvy and Mather Pvt. Ltd. ITA Nos. No. 1637 & 1638/M/2021 &Ors. 3. ACIT Vs Zyndus Infrastructure (P} Ltd [2016] 72 taxmann.com 199 4. Ushodaya Enterprises Ltd V ACIT [2014] 149 I 5. Maruti Udyog Ltd. Vs DCIT [2005] 92 ITD 119 (Delhi) 6. National Collateral Management Services P. Ltd Vs Add CIT Rg 7(1) Mumbai (ITA No.2237/Mum/2013) 7. Sec. 154(1) of the Act confers power on the IT authorities, as insection 116 of the Act, to amend any order passed by it under the provisions of theAct. The power can be exercised, "to rectify any mistake apparent on record." Theexercise of power under s. 154(1) of the Act by the IT authorities are subject to the condition that there is a mistake apparent from the record. In Asst. CIT vs.Saurashtra Kutch Stock Exchange Ltd. (2008) 219 CTR (SC) 90, the Supreme Court, while dealing with a case arising under s. 254 of the Act, considered the scope of the words and phrase "mistake apparent on the face of the record". The hon'ble Supreme Court held: "In our judgment, therefore, a patent, manifest and self- which does not require elaborate discussion of evidence or argument to establish it, can be said to be an error apparent on the face of the record and can be corrected while exercising certiorari jurisdiction. An error cannot be said to be apparent on the face of the record if one has to travel beyond the record to see whether the judgment is rect or not.An error apparent on the face of the record means an error which strikes on mere looking and does not need, long drawn out process of reasoning on points where there may conceivably be two opinions. Such error should not require any extraneous show its incorrectness. To put it differently, it should be so manifest and clear that no Court would permit it to remain on record. If the view accepted by the Court in the original judgment is one of the possible views, the case cannot be said to be covered by an error apparent on the face of the record". (emphasis supplied) In the present case, considering facts and circumstances, I hold that the Assessing Officer is not justified in making a rectification on a ” M/s Ogilvy and Mather Pvt. Ltd. 12 ITA Nos. No. 1637 & 1638/M/2021 &Ors. 3. ACIT Vs Zyndus Infrastructure (P} Ltd [2016] 72 taxmann.com 199 4. Ushodaya Enterprises Ltd V ACIT [2014] 149 ITD 352 6. National Collateral Management Services P. Ltd Vs Add CIT Rg 7. Sec. 154(1) of the Act confers power on the IT authorities, as insection 116 of the Act, to amend any order passed by it under the provisions of theAct. The power can be exercised, "to rectify any mistake apparent on record." Theexercise of power under ect to the condition that there is a mistake apparent from the record. In Asst. CIT vs.Saurashtra Kutch Stock Exchange Ltd. (2008) 219 CTR (SC) 90, the Supreme Court, while dealing with a case arising under s. 254 of rds and phrase "mistake apparent on the face of the record". The hon'ble Supreme Court held: -evident error which does not require elaborate discussion of evidence or argument said to be an error apparent on the face of the record and can be corrected while exercising certiorari jurisdiction. An error cannot be said to be apparent on the face of the record if one has to travel beyond the record to see whether the judgment is rect or not.An error apparent on the face of the record means an error which strikes on mere looking and does not need, long drawn out process of reasoning on points where there may conceivably be two opinions. Such error should not require any extraneous matter to show its incorrectness. To put it differently, it should be so manifest and clear that no Court would permit it to remain on record. If the view accepted by the Court in the original judgment is one of the to be covered by an error In the present case, considering facts and circumstances, I hold that the Assessing Officer is not justified in making a rectification on a 7. The Ld. DR submitted that computer software software is embedded in depreciation would be allowed @ 60 restricted to 25% same 8. On the contrary, the Ld. Counsel of t finding of the Ld. CIT(A). 8.1 We have heard rival submission of the dispute and perused the relevant material on record. T in view of the decision of the special bench of the case of Amway India Enterprises Vs DCIT (2008) 114 TTJ 476 (SB) allowed the claim of the assessee of depreciation at the rate of the 60% on computer software being a tangible Further,we find that under rule depreciation on any block of assets is to be percentage specified in the second column of the table in the appendix I to those rules, of assets. From assessment year 2006 has been made effective. head “tangible assets three sub head. Under the su No. 5,item of computers including computer software has be prescribed for depreciation rate of 60% which has been amended to 40% w year before us is M/s Ogilvy and Mather Pvt. Ltd. ITA Nos. No. 1637 & 1638/M/2021 &Ors. submitted that computer software is embedded in computer hardware itself then only depreciation would be allowed @ 60%,otherwise it should be % same, treating it to be ‘Plant’. On the contrary, the Ld. Counsel of the assessee relied on the finding of the Ld. CIT(A). We have heard rival submission of the parties dispute and perused the relevant material on record. T in view of the decision of the special bench of the Amway India Enterprises Vs DCIT (2008) 114 TTJ 476 allowed the claim of the assessee of depreciation at the rate of the 60% on computer software being a tangible we find that under rule 5 of the Income tax depreciation on any block of assets is to be calculated, percentage specified in the second column of the table in the rules, on the written down value of such block From assessment year 2006-07 onward new Appendix I effective. In the part A of said appendix under the assets”, list of assets has been prescribed under three sub head. Under the sub head of ‘Machinery and item of computers including computer software has be prescribed for depreciation rate of 60% which has been with effect from 01/04/2017. Since assessment year before us is 2012-13, therefore during relevant M/s Ogilvy and Mather Pvt. Ltd. 13 ITA Nos. No. 1637 & 1638/M/2021 &Ors. submitted that computer software that if the itself then only otherwise it should be he assessee relied on the on the issue in dispute and perused the relevant material on record. The Ld. CIT(A) in view of the decision of the special bench of the Tribunal in the Amway India Enterprises Vs DCIT (2008) 114 TTJ 476 allowed the claim of the assessee of depreciation at the rate of the 60% on computer software being a tangible property. ncome tax Rules, 1962, calculated, at the percentage specified in the second column of the table in the the written down value of such block 07 onward new Appendix I In the part A of said appendix under the been prescribed under and Plant’, at Sr item of computers including computer software has been prescribed for depreciation rate of 60% which has been from 01/04/2017. Since assessment therefore during relevant period depreciation rate prescribed was of 60 appendix has been provided, which reads that meansany computer program recorded on any disk, tape, perforated media or other information storage device. opinion, the ld CIT(A) has correctly allowed the depreciation after verification of Rules infirmity in the order of the Ld. CIT(A) accordingly, we uphold the same. The ground No. 1 and 2 of the Revenue are accordingly dismissed. 10. In ground No. 3, the Revenue is agitated for the issue of depreciation rate of computer software for the purpose of rectification. In this regard the Ld. CIT(A) in detailed finding held as under: “7. Sec. 154(1) of the Act confers power on the IT authorities, as enumerated insection 1 it under the provisions of theAct. The power can be exercised, "to rectify any mistake apparent on record." Theexercise of power under s. 154(1) of the Act by the IT authorities are that there is a mistake apparent from the record. In Asst. CIT vs.Saurashtra Kutch Stock Exchange Ltd. (2008) 219 CTR (SC) 90, the Supreme Court, while dealing with a case arising under s. 254 of the Act, considered the scope of the words and phrase "mistake apparent on the face of the record". The hon'ble Supreme Court held: "In our judgment, therefore, a patent, manifest and self which does not require elaborate discussion of evidence or argument to establish it, can be said to be an error appare record and can be corrected while exercising certiorari jurisdiction. An error cannot be said to be apparent on the face of the record if one has to travel beyond the record to see whether the judgment is correct or not.An error appar error which strikes on mere looking and does not need, long drawn M/s Ogilvy and Mather Pvt. Ltd. ITA Nos. No. 1637 & 1638/M/2021 &Ors. depreciation rate prescribed was of 60%.Further,a note s been provided, which reads that computer software computer program recorded on any disk, tape, perforated media or other information storage device. the ld CIT(A) has correctly allowed the depreciation after verification of Rules and law on the issue and we don’t find any infirmity in the order of the Ld. CIT(A) on issue we uphold the same. The ground No. 1 and 2 of the Revenue are accordingly dismissed. In ground No. 3, the Revenue is agitated for the issue of depreciation rate of computer software for the purpose of rectification. In this regard the Ld. CIT(A) in detailed finding held 7. Sec. 154(1) of the Act confers power on the IT authorities, as enumerated insection 116 of the Act, to amend any order passed by it under the provisions of theAct. The power can be exercised, "to rectify any mistake apparent on record." Theexercise of power under s. 154(1) of the Act by the IT authorities are subject to the condition there is a mistake apparent from the record. In Asst. CIT vs.Saurashtra Kutch Stock Exchange Ltd. (2008) 219 CTR (SC) 90, the Supreme Court, while dealing with a case arising under s. 254 of the Act, considered the scope of the words and phrase "mistake parent on the face of the record". The hon'ble Supreme Court held: "In our judgment, therefore, a patent, manifest and self- which does not require elaborate discussion of evidence or argument to establish it, can be said to be an error apparent on the face of the record and can be corrected while exercising certiorari jurisdiction. An error cannot be said to be apparent on the face of the record if one has to travel beyond the record to see whether the judgment is correct or not.An error apparent on the face of the record means an error which strikes on mere looking and does not need, long drawn M/s Ogilvy and Mather Pvt. Ltd. 14 ITA Nos. No. 1637 & 1638/M/2021 &Ors. %.Further,a note7 below the computer software computer program recorded on any disk, tape, perforated media or other information storage device.In our the ld CIT(A) has correctly allowed the depreciation after and law on the issue and we don’t find any in dispute and we uphold the same. The ground No. 1 and 2 of the In ground No. 3, the Revenue is agitated for not considering the issue of depreciation rate of computer software for the purpose of rectification. In this regard the Ld. CIT(A) in detailed finding held 7. Sec. 154(1) of the Act confers power on the IT authorities, as 16 of the Act, to amend any order passed by it under the provisions of theAct. The power can be exercised, "to rectify any mistake apparent on record." Theexercise of power under to the condition there is a mistake apparent from the record. In Asst. CIT vs.Saurashtra Kutch Stock Exchange Ltd. (2008) 219 CTR (SC) 90, the Supreme Court, while dealing with a case arising under s. 254 of the Act, considered the scope of the words and phrase "mistake parent on the face of the record". The hon'ble Supreme Court held: -evident error which does not require elaborate discussion of evidence or argument nt on the face of the record and can be corrected while exercising certiorari jurisdiction. An error cannot be said to be apparent on the face of the record if one has to travel beyond the record to see whether the judgment is ent on the face of the record means an error which strikes on mere looking and does not need, long drawn out process of reasoning on points where there may conceivably be two opinions. Such error should not require any extraneous matter to show its incorrectness. To put it differently, it should be so manifest and clear that no Court would permit it to remain on record. If the view accepted by the Court in the original judgment is one of the possible views, the case cannot be said to be covered by an error apparent on the face of the record". (emphasis supplied) In the present case, considering facts and circumstances, I hold that the Assessing Officer is not justified in making a rectification on a substantive issue.” 11. We have heard rival submission dispute and perused the relevant material on record. In our opinion, whether the computer software depreciation @ 60% or 25% there are no apparent mistake of record poi Accordingly, we do not find any error in the order of the Ld. CIT(A) on the issue in dispute and we uphold the same. The ground No. 3 of the appeal of the Revenue is dismissed. 12. In the cross objection, the assessee has supported of the Ld. CIT(A) on the issue of depreciation of computer software. Since, we have already dismissed the ground of the Revenue on this issue therefore, this ground is rendered merely academic and hence, same is dismissed as infructuous. 12.1 The grounds raised in cross appeals for AY 2013 objection by the assessee raised in cross appeal M/s Ogilvy and Mather Pvt. Ltd. ITA Nos. No. 1637 & 1638/M/2021 &Ors. out process of reasoning on points where there may conceivably be two opinions. Such error should not require any extraneous matter to ctness. To put it differently, it should be so manifest and clear that no Court would permit it to remain on record. If the view accepted by the Court in the original judgment is one of the possible views, the case cannot be said to be covered by an error apparent on the face of the record". (emphasis supplied) In the present case, considering facts and circumstances, I hold that the Assessing Officer is not justified in making a rectification on a ” We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. In our opinion, whether the computer software should be depreciation @ 60% or 25% ,cannot be a matter of rectification as there are no apparent mistake of record pointed out by the Ld. DR. Accordingly, we do not find any error in the order of the Ld. CIT(A) on the issue in dispute and we uphold the same. The ground No. 3 of the appeal of the Revenue is dismissed. In the cross objection, the assessee has supported of the Ld. CIT(A) on the issue of depreciation of computer software. Since, we have already dismissed the ground of the Revenue on this issue therefore, this ground is rendered merely academic and , same is dismissed as infructuous. The grounds raised in cross appeals for AY 2013 objection by the assessee for AY 2012-13 are identical raised in cross appeals for assessment year 2012 M/s Ogilvy and Mather Pvt. Ltd. 15 ITA Nos. No. 1637 & 1638/M/2021 &Ors. out process of reasoning on points where there may conceivably be two opinions. Such error should not require any extraneous matter to ctness. To put it differently, it should be so manifest and clear that no Court would permit it to remain on record. If the view accepted by the Court in the original judgment is one of the possible views, the case cannot be said to be covered by an error In the present case, considering facts and circumstances, I hold that the Assessing Officer is not justified in making a rectification on a he parties on the issue in dispute and perused the relevant material on record. In our should be subject to cannot be a matter of rectification as nted out by the Ld. DR. Accordingly, we do not find any error in the order of the Ld. CIT(A) on the issue in dispute and we uphold the same. The ground No. 3 In the cross objection, the assessee has supported the finding of the Ld. CIT(A) on the issue of depreciation of computer software. Since, we have already dismissed the ground of the Revenue on this issue therefore, this ground is rendered merely academic and The grounds raised in cross appeals for AY 2013-14 and cross identical to grounds for assessment year 2012-13 and cross objection of the assessee mutandis. 13. In assessment year 2016 The grounds raised in the appeal of the assessee are identical grounds raised in the assessment year 2012 are decided mutatis mutandis. 14. In the result, the are dismissed. The cross objection dismissed. Order pronounced in the open Court on Sd/- (NARENDER KUMAR CHOUDHRY JUDICIAL MEMBER Mumbai; Dated: 29/05/2023 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// M/s Ogilvy and Mather Pvt. Ltd. ITA Nos. No. 1637 & 1638/M/2021 &Ors. objection of the assessee, therefore, same are decided mutatis In assessment year 2016-17, the assessee is only in appeal he grounds raised in the appeal of the assessee are identical grounds raised in the assessment year 2012-13 and therefore, same are decided mutatis mutandis. In the result, the cross appeals of the assessee and Revenue he cross objections of the assessee are also nounced in the open Court on 29/05/2023. Sd/ NARENDER KUMAR CHOUDHRY) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai M/s Ogilvy and Mather Pvt. Ltd. 16 ITA Nos. No. 1637 & 1638/M/2021 &Ors. therefore, same are decided mutatis 17, the assessee is only in appeal. he grounds raised in the appeal of the assessee are identical to 13 and therefore, same of the assessee and Revenue of the assessee are also /05/2023. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai