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TMI Blog2016 (2) TMI 737X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore we hereby direct the learned Assessing Officer to delete the addition made by him on this count. - Decided against revenue Restriction of excess depreciation claimed on software - Held that:- CIT relying on the decision in the case of Amway India Enterprises Vs. DCIT [2008 (2) TMI 454 - ITAT DELHI-C] correctly held that the assessee would be entitled for depreciation @ 60% since “computer software” falls in the category of “plant”. On perusing the facts of the case, we find the decision of learned CIT(A) to be justified because the Special Bench of the Tribunal (supra) has categorically held that with effect from 01.04.2003 “computer software” has to be classified as “tangible asset” under the heading ‘plant’ as mentioned in A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 13,92,75,530/-. Subsequently, the return was selected for scrutiny under CASS and the Ld. Assessing Officer completed the assessment u/s.143(3) of the Act on 28.03.2013 wherein he restricted the claim of depreciation. 4. Ground No.1 - Disallowance of depreciation under section 36(1)(iii) of the Act:- It was noticed by the learned Assessing Officer that assessee had capitalized interest expenditure in the case of VSI property for ₹ 13,93,971/- being the interest paid on the bank loan for construction of building amounting to ₹ 2,08,18,308/-. However, it was opined by the learned Assessing Officer that interest expenses incurred for acquisition of land has also to be capitalized till the date of completion of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any capital asset, all such costs incurred till the date of capitalization / put to use are to be added to the cost of such capital asset. In the instant case, the assessee has chosen to capitalize the interest in the case of the building (a depreciable asset) and on the other hand, claim the interest expenditure incurred for the acquisition of land (nondepreciable asset) as revenue expenditure. Such double standards are neither admissible nor permissible under the accounting standards of the Income Tax Act, 1961. Further for obvious reasons the date of put to use in the case of land has to be taken as the same as that of the building. Hence, the entire interest expenditure till such date of putting into use i.e. 07.12.2009 has to be necess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proviso to section 36(1)(iii) the disallowance of interest expenditure of ₹ 40,31,149/- made by the Assessing Officer in the assessment order is sustained. The grounds are dismissed. 6. The learned Authorized Representative submitted before us that immediately after the land was acquired it was handed over for construction on the very same day and therefore it should be construed that the land was put to use. It was therefore pleaded that interest attributable for purchase of land has to be allowed as business expenditure and not to be capitalized. The learned DR, on the other hand, argued in support of the orders of the Revenue. 7. We have heard the rival contentions and carefully perused the materials on record. We find ..... X X X X Extracts X X X X X X X X Extracts X X X X
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