9911796707
TMI Blog2016 (2) TMI 737X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act for the assessment year 2010-11. 2. The concised grounds raised in these two appeals are listed here-in-below for adjudication. 2.A Assessee's Appeal : (i) The Ld. CIT(A) has erred in confirming the disallowance of interest paid on the loan to the extent it was applied for acquisition of the land until the date of construction of the building was completed by holding that the same has to be capitalized. 2.B. Revenue's Appeal: (ii) The Ld. CIT(A) has erred by holding that depreciation is allowable to software license @ 60% whereas depreciation is only allowable @ 25%. 3. The assessee is a company, engaged in the business of Data processing,pre-press services and export of software, filed its return of income for the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Citi Bank via MITL 421397 for Rs. 5.5 crores and MITL - 421489 for Rs. 2.4 crores. The loans were repaid in full ahead of schedule on 25.03.2010 and 22.02.2010. The ledger accounts of these two loan accounts are enclosed. The interest paid on these loans and the computations are enclosed. You will note that to the extent of the interest paid on the loan amount applied for the building until 7th December, 2009 has been capitalized." The assessee's contentions were rejected by the learned Assessing Officer. Thereafter, he disallowed interest expenditure of Rs. 40,31,149/- as allowable deduction since it was to be capitalized. While doing so, he made the following observation:- "Land and buildings are capital assets and in the case of any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roviso stipulates that interest paid on capital borrowed for acquisition of an asset till the day the asset was first put to use shall not be allowed as deduction. As per the appellant's submissions the land was put to use by the appellant along with the buildings and the appellant occupied it on 5.12.2009. Taking possession of the land and handling it over to the contractor for constructing a building cannot be treated as put to use for the purpose of business by the appellant. As fairly observed by the Assessing Officer in the assessment order the date of first use of land can be taken as date on which the building constructed on the land was first put to use. As the facts of the case of the appellant are squarely covered by the proviso t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Sony India Vs. Additional. CIT (ITAT., Delhi) reported in 56 DTR 156), the Ld. Assessing Officer allowed depreciation @ 25%. On appeal, the learned CIT relying on the decision in the case of Amway India Enterprises Vs. DCIT 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 Appendix I to Income Tax Rules, 1962. Therefore we do not find it necessary to interfere with the o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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