2012 (1) TMI 419 - AT - Income Tax

Summary

Issues involved: Appeal by Revenue against CIT(Appeals) order, depreciation rate on software, disallowance of lease equalization charges under Section 115JB.

Depreciation on software: Revenue appealed CIT(Appeals) order directing 60% depreciation on software, citing previous year's 25% allowance. AR argued for 60% depreciation as per rules and Income-tax Act. Tribunal found software fell under 60% depreciation in Income-tax Rules, rejecting Revenue's argument based on previous year's decision. Ground No.2 dismissed.

Disallowance of lease equalization charges: Revenue challenged deletion of disallowance of lease equalization charges under Section 115JB. AR cited High Court decision that such charges were not a reserve and should not be added back to profits. DR admitted issue favored assessee based on High Court decision. Tribunal upheld CIT(Appeals) decision, finding no error. Ground No.3 dismissed.

Conclusion: Revenue's appeal dismissed, upholding CIT(Appeals) orders on depreciation rate for software and lease equalization charges under Section 115JB.