2019 (2) TMI 1646 - HC - Income Tax

Disallowance of Depreciation u/s. 32(1) on addition of software - HELD THAT - ADMIT appeal on - Whether the Income Tax Appellate Tribunal was justified in upholding the decision of Commissioner (Appeals) in deleting the disallowance of depreciation on software under section 32(1) of the Income Tax Act, 1961? Disallowance of Foreign Exchange Fluctuations Gain - HELD THAT - ITAT has merely applied the decision of this court in the case of Commissioner of Income Tax v. Priyanka Gems, 2014 (3) TMI 938 - GUJARAT HIGH COURT to the facts of the present case; under the circumstances, the impugned order does not give rise to any question of law insofar as the proposed question B is concerned.

Summary

Issues:
1. Disallowance of Depreciation under section 32(1) on addition of software
2. Disallowance of Foreign Exchange Fluctuations Gain

Analysis:
1. The appellant challenged the impugned order passed by the Income Tax Appellate Tribunal on two questions. The first question pertained to the disallowance of depreciation under section 32(1) on the addition of software amounting to ?17,20,361. The court admitted the appeal for consideration, highlighting the substantial question of law: whether the Tribunal was justified in upholding the decision of the Commissioner (Appeals) in deleting the disallowance of depreciation on software under section 32(1) of the Income Tax Act, 1961.

2. Regarding the second question on the disallowance of Foreign Exchange Fluctuations Gain of ?2,32,88,197, the Income Tax Appellate Tribunal applied a previous court decision to the present case. The court noted that the impugned order did not raise any question of law concerning the disallowance of Foreign Exchange Fluctuations Gain. The Tribunal's decision aligned with the precedent set by the court in a prior case, Commissioner of Income Tax v. Priyanka Gems, [2014] 367 ITR 575 (Guj.), leading to the conclusion that no legal issue arose in this context.