Huber+Suhner Electonics Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 1523/DEL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3903 (ITAT-DELHI)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 08-06-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 07-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D N KAR
• Keywords: Depreciation; Set aside
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C DELHI BEFORE SHRI A.D. JAIN AND SHRI K.G. BANSAL ITA NO. 1523(DEL)/2010 ASSESSMENT YEAR: 2006-07 HUBER+SUHNER ELECTRONICS DE PUTY COMMISSIONER OF PVT. LTD. 204-206, TOLSTOY VS. IN COME-TAX, CIRCLE 12(1), HOUSE, 15, TOLSTOY MARG, NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJAN BHATIA, ADVOCATE RESPONDENT BY: SH RI D.N. KAR, CIT, DR ORDER PER K.G. BANSAL : AM THIS APPEAL OF THE ASSESSEE EMANATES FROM THE ORDER OF THE COMMISSIONER OF INCOME-TAX, DELHI-IV, NEW DELHI, PASSED IN F. NO. CIT- IV/263/2009-10/2950, ON 05.02.2010 UNDER THE PR OVISION OF SECTION 263 OF THE INCOME-TAX ACT, AND IT PERTAINS TO ASSE SSMENT YEAR 2006-07. THE CORRESPONDING ORDER OF ASSESSMENT WAS FRAMED BY THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE 12(1), NEW DELH I ON 4.11.2008, UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 . 2. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TOWARDS ENTRY NO. (5) UNDER THE HEAD MACHINERY AND PLANT OF APPENDIX- ITA NO. 1523(DEL)/2010 2 I OF THE INCOME-TAX RULES, 1962, LAYING DOWN TH E RATE OF DEPRECIATION IN RESPECT OF COMPUTERS INCLUDING COMPUTER SOFTWA RE AT 60 PER CENT. NOTE 7 BELOW THE APPENDIX DEFINES COMPUTER SO FTWARE TO MEAN ANY COMPUTER PROGRAMME RECORDED ON ANY DISC, TAPE, PERFORATED MEDIA OR OTHER INFORMATION STORAGE DEVICE. ON THE BASIS OF THIS ENTRY, HIS CASE IS THAT THE AO RIGHTLY ALLOWED DEPRECIATION ON ERP SOFTWARE @ 60 PER CENT. THE DEDUCTION WAS RESTRICTED TO 50 PER C ENT OF THE AMOUNT CALCULATED AS ABOVE BECAUSE THE SOFTWARE WAS US ED FOR LESS THAN 180 DAYS. SINCE THERE IS NO ERROR IN THE ORDER OF T HE AO, THE SAME COULD NOT BE SAID TO BE EITHER ERRONEOUS OR PREJUDICIAL T O THE INTERESTS OF THE REVENUE. IN REPLY, THE LD. DR RELIES ON THE REVISIONARY ORDER OF THE LD. CIT. 3. WE HAVE CONSIDERED THE FACTS OF THE CASE AN D SUBMISSIONS MADE BEFORE US. THE OPERATIVE PORTION OF THE ORDER OF THE LEARNED CIT READS AS UNDER:- I HAVE HEARD THE AUTHORIZED REPRESENTATIVE, G ONE THROUGH THE SUBMISSION AS ALSO THE FACTS OF RECORDS. I AM OF THE VIEW THAT THE ISSUE RAISED BY AR NEEDS CONSIDERATIO N ON MERIT AT THE STAGE OF A.O AS PER LAW. AT THE SAME TIME I T IS ALSO A MATTER OF RECORD THAT THERE IS A LACK OF ENQU IRY/INVESTIGATION ON THE PART OF THE ASSESSING OFFICER. TO THAT EXTENT IT CAN CERTAINLY BE HELD THAT THE ORDER OF THE AO IS BOT H ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENU E. THEREFORE, ITA NO. 1523(DEL)/2010 3 THE PROVISION OF SECTION 263 OF THE ACT AND THE ORDER OF THE ASSESSING OFFICER IS SET ASIDE TO BE REDONE AF RESH. THE ASSESSEE SHALL BE GIVEN REASONABLE OPPORTUNITIES OF BEING HEARD. 3.1 ON PERUSAL OF THE APPENDIX-I, WE FIND THAT TH E ASSESSEE IS ENTITLED TO DEDUCTION OF DEPRECIATION @ 60 PER CENT OF THE COST OF THE SOFTWARE. SINCE THE SOFTWARE HAS BEEN USED FOR LESS THAN 180 DAYS, THE DEDUCTION IS TO BE GRANTED EFFECTIVELY @ 30 PER CENT OF THE COST OF THE SOFTWARE. THIS IS WHAT HAS BEEN DONE BY THE AO. THEREFORE, THE ORDER CANNOT BE SAID TO BE ERRONEOUS OR PREJUDICIAL TO THE INT ERESTS OF THE REVENUE. IN VIEW THEREOF, THE ORDER OF THE LD. CIT IS SET ASIDE AND THAT OF THE AO IS RESTORED. 4. IN THE RESULT, THE APPEAL IS ALLOWED. THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 8 TH JUNE, 2010 SOON AFTER THE CONCLUSION OF THE HEARING. SD/- SD/- (A.D. JAIN) (K.G.BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE OF ORDER: 8TH JUNE, 2010. SP SATIA ITA NO. 1523(DEL)/2010 4 COPY OF THE ORDER FORWARDED TO:- 1. HUBER+ SUHNER ELECTRONICS PVT. LTD., NEW DELHI. 2. DY. CIT, CIRCLE 12(1), NEW DELHI. 3. CIT, DELHI-IV, NEW DELHI. 4. THE DR, ITAT, NEW DELHI. ASSISTANT REGISTRAR.