DCIT, C-1(1), Chandigarh V. Dr. Apurva Goswamy, Chandigarh

MA 109/CHANDI/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5766 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 07-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 12-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDRA KANTA
• Assessee Lawyers: HARISH NAYYAR
• Keywords: Capital asset; Depreciation; Revenue expenditure; Capital expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH A, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER M.A. NO. 109/CHD/2019 (IN ITA NO. 1343/CHD/2017) (ASSESSMENT YEAR: 2010-11) THE DCIT VS. DR. APURVA GOSWAMY CIRCLE-1(1) PROP. QUANTUM SOLUTIONS CHANDIGARH BLOCK-D, IIRD FLOOR, POT NO. 22-23, DLF, IT PARK KISHANGARH, CHANDIGARH PAN: AAUPG7800N (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI HARISH NAYYAR DEPARTMENT BY : SMT. CHANDRAKANTA DATE OF HEARING : 06/08/2019 DATE OF PRONOUNCEMENT : 07/08/2019 O R D E R PER DR.B.R.R.KUMAR, A.M . THE PRESENT MISC. APPLICATION HAS BEEN FILED BY THE DEPARTMENT AND REQUESTING FOR RECTIFICATION OF THE ORDER DATED 29/ 11/2018 IN ITA NO. 1343/CHD/2017 FOR ASSESSMENT YEAR 2010-11. 2. THE RELEVANT PART OF THE M.A IS AS UNDER: FURTHER THE HONBLE ITAT AT PARA NO. 13 OF ITS OR DER HAS HELD THAT THE ASSESSEE IS ELIGIBLE FOR 60% DEPRECIATION. THE PERUSAL OF THE A SSESSMENT RECORD/ORDER SHOWS THAT THE ASSESSEE ACQUIRED THE CAPITAL ASSETS FROM THE ORACLE ON 18.11.2009 BEING LESS THAN 180 DAYS AND THUS WAS ELIGIBLE FOR 30% OF DEPRECIATION BUT THE HONBLE ITAT HELD THAT ASSESSEE IS ELIGIBLE FOR 60% OF DEPRECIATION ON CAPITAL ASSETS ACQUIRED FOR ORACLE AND THUS A RECTIFICATION IS REQ UIRED IN THE ORDER OF THE HONBLE ITAT. 2 3. THE RELEVANT PART OF THE ORDER OF THE ITAT ON TH E ISSUE WHETHER COMPUTER ACCESSORIES ARE ELIGIBLE FOR 60% DEPRECIATION OR NO T IS AS UNDER: 13. IN THE PRESENT CASE THE PURCHASE OF SOFTWARE LI CENSE WAS DONE BY THE ASSESSEE FOR CARRYING OUT OBLIGATION FOR THEIR CLIE NTS. THE AMOUNT SPENT ON INCREASING THE EARNING CAPACITY OF THE CONCERNED AN D ANY EXPENDITURE WITH RELATION TO SUCH EXPENSES BE TREATED AS CAPITAL EXP ENDITURE. THE ASSET CAN MAY BE TANGIBLE OR INTANGIBLE AND ACQUISITION OF INTANG IBLE ASSET NEED NOT NECESSARILY BE TAKEN AS REVENUE EXPENDITURE. HENCE KEEPING IN V IEW THE NATURE OF THE ASSET, NATURE OF THE LIABILITY, NATURE OF THE TRANSACTION, PURPOSE OF THE TRANSACTION, REVENUE EARNING CAPABILITY, MAINTENANCE AND UP-GRAD ATION, PERPETUAL UTILIZATION, WE HEREBY HOLD THAT THE PURCHASES BY T HE ASSESSEE BE TREATED AS CAPITAL EXPENDITURE AND ELIGIBLE FOR 60% OF DEPRECI ATION. 3.1 FROM THE ABOVE IT CAN BE DECIPHERED THAT A PRIN CIPLE HAS BEEN LAID DOWN REGARDING THE PERCENTAGE OF DEPRECIATION ALLOW ABLE. HENCE, IT CANNOT BE READ THAT THE DEPRECIATION IS ALLOWED @ 60% ON T HE ASSETS WHICH HAVE BEEN USED FOR LESS THAN 180 DAYS. IN CASES WHERE THE ASS ET IS PUT TO USE FOR LESS THAN 180 DAYS THE ASSESSEE WOULD BE ELIGIBLE FOR 50% OF THE ALLOWABLE DEPRECIATION ONLY AS STIPULATED BY THE ACT. 4. SINCE THERE IS NO MISTAKE IN THE ORDER OF THE TR IBUNAL, NO CASE OF RECTIFICATION UNDER SUB SECTION 2 OF SECTION 254 O F THE INCOME TAX ACT,1961 COULD BE MADE. HENCE, THE M.A IS HEREBY DISMISSED. 5. IN THE RESULT, MISC. APPLICATION FILED BY THE DE PARTMENT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (DR. B.R.R . KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 07/08/2019 AG COPY TO: 1.THE APPELLANT, 2. THE RESPONDENT, 3. THE CIT(A ), 4. THE CIT, 5. THE DR