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TMI Blog2017 (8) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... same cannot be restricted to 25% merely on the ground that depreciation was claimed at the rate of 25% till assessment year 2003-2004. Although, the assessee has classified the software under ‘computer software and intellectual property rights’, it is very well settled that nomenclature cannot be conclusive and decisive regarding the nature of transaction and it is the substance of the matter which should be looked into rather than the form or the nomenclature by which the same might have been called. - Decided against revenue - I.T.A .No. 6091/DEL/2013 And I.T.A .No. 6092/DEL/2013 - - - Dated:- 11-4-2017 - SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER For The Appellant : Shri Umesh Chand Dubey, S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred appeals for both the years before the Ld. Commissioner of Income Tax (Appeals) who deleted the additions in both the years. Now the Department has approached the ITAT and has raised the following grounds of appeal 2.2 Grounds in ITA 6091/Del/2013 1. Ld. CIT (A) erred in law and on the facts of the case in deleting the addition of ₹ 14,16,29,253/- made by the AO on account of depreciation on Software by reducing depreciation allowance @ 25% as against 60% claimed by the assessee. 2. The appellant craves, leave or reserving the right to amend modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal. 2.3 Grounds in ITA No. 6092/Del/2013 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he practice of capitalising the same under the subhead software and intellectual property rights under the head intangibles in its audited financial statements prepared as per the provisions of the Companies Act, 1956. It was further submitted that the assessee had shown the same under the head intangibles as there was no class of asset defined as software in the prescribed schedule XIV of the Companies Act, 1956 and also as required by Accounting Standard AS 26 Accounting for intangible assets issued by the Institute of Chartered Accountants of India. The Ld. AR further submitted that in response to the show cause notice it was submitted that software has been classified as a tangible asset under the head plant in Appendix I to I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that the eligible rate of depreciation for computers under item No. 5 in the head plant and machinery was 60%. The Ld. AR also relied on the order of the ITAT Chennai Bench in ITA No. 107/MDS/2012 in the case of Laser Soft Infosystems Ltd versus ITO wherein, vide order dated 31/01/2013, the Bench of the ITAT had held that computer software was a tangible asset and as per clause III (5) of new Appendix I read with Rule 5 of the Income Tax Rules, 1962, the rate of depreciation as applicable on computer software was 60%. It was submitted that in view of the facts as well as the settled judicial precedents, the assessee was eligible for depreciation at the rate of 60% and, therefore, the impugned orders should be upheld. 5. We ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2003, prior to which the rate of depreciation was 25% only. Hence, as per the rate prescribed by the Income Tax Rules, the assessee is entitled to depreciation at the rate of 60% and the action of the assessee in claiming the depreciation on the basis of the amended rate of depreciation on software cannot be faulted with and the same cannot be restricted to 25% merely on the ground that depreciation was claimed at the rate of 25% till assessment year 2003-2004. Although, the assessee has classified the software under computer software and intellectual property rights , it is very well settled that nomenclature cannot be conclusive and decisive regarding the nature of transaction and it is the substance of the matter which should be looked ..... X X X X Extracts X X X X X X X X Extracts X X X X
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