9911796707
TMI Blog2011 (5) TMI 653X X X X Extracts X X X X X X X X Extracts X X X X ..... Depreciation on ERP software – Held that:- Computers including Computer software is entitled to depreciation at 60%. It cannot be considered as intangible assets eligible for depreciation @25%. Decided in favor of the assessee. Amount transferred from special reserve and set off against the depreciation in the Books – Held that:- The assessee followed the accounting practice of transferring proportionate amount from this Special Reserve and setting off of book depreciation for several years .The set off of special reserve against book depreciation donot affect the income. Also as the amount was received in 1992 therefore the same cannot be treated income of assessee in this year. This was only a mere book entry which was set off against depreciation. Decided in favor of the assessee. Additional depreciation on new plant and machinery installed. – Held that:- Grant of depreciation and additional depreciation is mandatory, whether claimed by the Assessee or not. Omission to claim depreciation in the return, will not disentitled the assessee to claim additional depreciation to which they are statutorily entitled to. Decided in favor of the assessee. - ITA No. 4904/Mum/2009, ITA N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ores/spares. We find that this issue has been decided by the ITAT in Assessee s own case by the ITAT for the AY 97-98 in ITA No. 2188/M/04 wherein at paras 2 1-22 the ITAT has held as follows: 21. The next issue common to all the appeals relates to disallowance of provisions for obsolete inventory. For the sake of convenience the facts relating to the Assessment Year 1997-98 are being narrated. The assessee had written off the sum of Rs. 11,20,000/- on account of items considered obsolete. Such items included instrument items, cement, paint and paint materials, safety shoes and dress material. The Assessing Officer disallowed the claim of the assessee following the Bombay High Court judgment in the case of Herdilla Chemicals Ltd. 225 ITR 532 wherein it was held that such loss cannot be claimed in any year in which assessee likes. Such loss can be claimed only in the year in which such items are sold and disposed off. On appeal, the disallowance made by Assessing Officer was confirmed. Aggrieved by the same the assessee is in appeal before the Tribunal for all the years. 22. Contention raised on behalf of the assessee is that the decision of the Bombay High Court did not consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laim of the Assessee holding as under: I have carefully considered the information on record. The Hon ble Tribunal Special Branch Mumbai in case of Daga Capital Management Ltd held that the provisions of Section 14A (2) and (3) or retrospective in nature and rule 8D would apply accordingly . Since this decision is being followed in all cases wherever Section 14A is involved, I do not find any infirmity in action taken by the Assessing Officer. Further, Rule 8D prescribes that the average value of assets at the beginning and at the end of the year is to be considered for the purpose of Rule 8D. Nowhere is it mentioned that the gross value of the fixed assets and not WDV should be taken. Regarding investment in subsidiary company Starchem, Rule 8D do not differentiate whether the investment is for the purpose of business and also in view of the fact that such disallowance is confirmed by the CIT(A) order for AY 2005-06, following the rule of consistency the disallowance made the Assessing Officer u/s.14A is confirmed . 8. The jurisdictional high Court in the case of Godrej Boyce Mfg Co Ltd v DCIT (328 ITR 81) has held that Rule 8D, for determining the disallowance u/s 14A is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said observations of Bombay High Court and for the sake of consistency, the learned CIT (A) upheld the contention of the assessee and consequently, disallowances made by the Assessing Officer were deleted. Aggrieved by the same, the Revenue is in appeals before the Tribunal. After hearing both the parties, we find that the issue is covered in favour of assessee by the decision of the Tribunal dated 31st December, 2004 in assessee s own case for the Assessment Year 1 990/-91, wherein the system of accounting adopted by the assessee has been accepted. Therefore, following the same, the orders of the learned CIT(A) are upheld . Since the facts and circumstances are exactly same, following the principles of consistency the addition made by the Assessing Officer of Rs. 13,11,309/- towards Prior Period Expenses is deleted. 10. Aggrieved the Department is on appeal before us. We find that on this very same issue, the ITAT by its order dt. 21.9.2007 for Assessment Year 1997-98 has held as follows: The next issue relates to the disallowance in respect of prior period expenses. This issue arises in the Assessment Years 1997-98, 1998-99 and 2000-01. The disallowance has been made wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quated. 12. The CIT (A) allowed the claim of the Assessee observing as under: The issue was covered in favour of assessee by the order of CIT (A) for A. Y 2004-05 and 2005-06. This was also covered by the Hon ble ITAT in favour of the assessee for AY 1997-98. The Hon ble ITAT discussed the issue at length and held that the word owner has to be understood in a wider sense and not in the legal sense as per the Transfer of Property Act. The sure test would be whether the assessee can exercise the right of the owner to the exclusion of others? As there is no change in facts and circumstances, respectfully following the decision of the ITAT, the addition made by the Assessing Officer of Rs.25,55,754/- is deleted. 13. Aggrieved the Department is on appeal. We find that for the A.Y 1997-98, the Tribunal has held as follows: A bare reading of the aforesaid articles shows that by virtue of holding of particular nos. of shares having particular distinctive nos., the holder would be entitled to have exclusive possession of a particular no. of flat so as to have exclusive use and occupation of the said flat. Thus, ownership a flat is attached with a particular and specific share h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Tata Consultancy Services 271 ITR 401 wherein it was held the computer software package was goods for the purpose of Central Excise. Therefore, it cannot be considered as intangible assets. In accordance with principles of consistency the Assessing Officer is directed to allow 60% depreciation on computer software. 18. Aggrieved Revenue is on appeal before us. The Learned Counsel for the assessee Shri H.P. Mahajani submitted before us that in Datacraft India Ltd (40 SOT 295) Special Bench Mumbai, it has been held that aid can be taken of the definition of the term computer given in Information Technology Act 2000. The Special Bench has reproduced the definition of computer which includes Computer Software . The Special Bench has held that from AY 2003-04 enhanced rates of 60% would apply to computer software. We heard both parties. 19. We find that from AY 2003-04, under the Depreciation Table in IT Rules, Computers including Computer software is entitled to depreciation at 60%. In this view of the matter we confirm the order of the CIT (A) granting depreciation at the rate 60% on the computer software and dismiss the revenue s appeal on this issue. 20. The next i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e immediately preceding assessment year 2004-0 5 and that the relevant assessment year 2005-0 6 is the first assessment year in which such addition has been made by the department. We find that there is no justification for the action of the department in making the addition of the amount transferred from special reserve. There being no mistake in the decision of the CIT (A) on this issue, we confirm the order of the CIT(A) on this issue and the ground of appeal no.4 of the revenue is dismissed. Respectfully following the decision of the ITAT in the Assessee s own case for the earlier years, we confirm the order of the CIT (A) and dismiss the Departmental appeal on this issue. 23. The last ground is against grant of additional depreciation of Rs. 26,96,923/- on new plant and machinery installed. The main grouse is that the claim was not made in the return of income. Grant of depreciation and additional depreciation is mandatory, whether claimed by the Assessee or not. Omission to claim depreciation in the return, will not disentitled the assessee to claim additional depreciation to which they are statutorily entitled to for the first time before the CIT (A). The requisite cert ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
