HV AXLES LTD, MUMBAI V. ITO 2(1)(4), MUMBAI

ITA 2231/MUM/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8208 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 17-02-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 19-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRAVAN KUMAR
• Assessee Lawyers: DINESH VYAS
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H, MUMBAI BEFORE SHRI RAJENDRA SINGH, A.M. AND SHRI V. DURGA RAO, J.M. ITA NO. 2231/MUM/2010 ASSESSMENT YEAR: 2002-03 HV AXLES LTD., APPELLANT 3 RD FLOOR, NANAVATI MAHALAYA 18, HOMI MODI STREET, HUTATMA CHOWK MUMBAI 400 001. (PAN AAACH7625P) VS. INCOME TAX OFFICER, RESPONDENT AAYAKAR BHAVAN, M.K. MARG, MUMBAI. APPELLANT BY : MR. DINESHVYAS RESPONDENT BY : MR. SHRAVAN KUMAR ORDER PER V. DURGA RAO, J.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT(A)- 4, MUMBAI, PASSED ON 20/01/2010 FOR THE ASS ESSMENT YEAR 2002-03. 2. THE GROUNDS RAISED IN THIS APPEAL IS ARE AS FOLL OWS:- 1. DISALLOWANCE OF SOFTWARE LICENCE FEES A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF LICENCE FEES PAID FOR ENTERPRISE RE SOURCE PLANNING SOFTWARE TREATING IT AS CAPITAL EXPENDITUR E. B) WITHOUT PREJUDICE TO ABOVE THAT THE EXPENDITURE ON SOFTWARE LICENCE FEES IS ALLOWABLE U/S 37(1), LEARNED CIT(A) HAS ERRED IN ITA NO. 2231/M/2010 HV AXLES LTD. 2 LAW AND ON FACTS IN ALLOWING DEPRECIATION @ 25% ONL Y INSTEAD OF DEPRECIATION @60%. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THAT T HE ABOVE SOFTWARE IS AN INTEGRAL PART OF COMPUTER FOR INTEND ED TO USE/FUNCTIONALITY AND HENCE DEPRECIATION AS APPLICA BLE TO COMPUTERS OUGHT TO HAVE BEEN ALLOWED. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THAT T HOUGH SOFTWARE HAVE BEEN INCLUDED WITH COMPUTERS CATEGORY W.E.F. AY 2003-04, IT HAS BEEN RECOGNIZED AS PART OF COMPUTER S ONLY AND NOT AS GENERAL PLANT AND MACHINERY CATEGORY AND HEN CE DEPRECIATION AS APPLICABLE TO COMPUTERS OUGHT TO HA VE BEEN ALLOWED @60%. 3. WE HAVE HEARD THE LEARNED REPRESENTATIVES, WHO H AVE AGREED THAT THE ISSUE IN THIS APPEAL IS COVERED BY THE DEC ISION OF THE ITAT FOR AY 2001-02 IN ASSESSEES OWN CASE. WE FIND THAT THE ITAT IN AY 2001- 02 FOLLOWING THE DECISION OF SPECIAL BENCH IN THE C ASE OF AMWAY INDIA ENTERPRISE [2008] 111 ITD 112 (DEL.)(SB), REMITTED THE MATTER BACK TO THE FILE OF THE AO WITH A DIRECTION TO DECIDE THE I SSUE AFRESH IN ACCORDANCE WITH THE SPECIAL BENCH DECISION. SINCE T HE ISSUE UNDER CONSIDERATION IS MATERIALLY IDENTICAL TO THAT OF AY 2001-02, WE RESPECTFULLY FOLLOW THE DECISION OF THE ITAT IN AY 2001-02 AND IN THE LIGHT OF THAT WE REMIT THE MATTER BACK TO THE FILE OF THE AO WITH IDENTICAL DIRECTIONS AS GIVEN IN AY 2001-02. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 25 TH DAY OF FEBRUARY, 2011. SD/- SD/- (RAJENDRA SINGH) (V. DU RGA RAO) ACCOUNTANT MEMBER JUDI CIAL MEMBER MUMBAI, DATED: 25 TH FEBRUARY 2011 ITA NO. 2231/M/2010 HV AXLES LTD. 3 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE, H BENCH, I.T .A.T., MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR, I.T.A.T., MUMBAI. KV