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TMI Blog2011 (9) TMI 1202X X X X Extracts X X X X X X X X Extracts X X X X ..... 0% in respect of digital content, when claim was made in respect of rights acquired to broadcast digital movies and as per new Appendix I to the IT Rules, 60% depreciation is available in respect of computers including computer software. Computer software is defined in note 7 to the appendix as a computer program recorded on any disc, tape, perforated media or other information storage device, whereas a digital movie is not a computer program though it may be recorded in a media defined in the notes mentioned. 2. Facts indicate that the assessee filed return of income at NIL after claiming deduction of Rs..2,49,45,920/- under section 10B of the Income Tax Act and set off of brought forward loss of Rs..48,89,413/- for the assessment year u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of claim of depreciation at 60% in respect of digital content acquired by the assessee for broadcasting feature films and allowing 25% depreciation, the assessee in appeal, contended that such part disallowance made by the Assessing Officer is neither proper nor justified because the assessee is entitled to depreciation at the rate of 60% because the above item is covered by item III(5) [i.e. computers including computer software] of article A (tangible assets) of Appendix I to Income Tax Rules, depreciation rate of 60% is given against such item and in the notes under Appendix l to r, the digital components covers in its definition as computer software received by it for its business activity for broadcast digital movies. Therefore, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A), while considering and accepting the plea of the assessee has concluded to allow the grounds as raised in the appeal as well as additional claim made during the arguments as per para 8.2, which reads as under: "8.2 I find that depreciation @ 60% for digital contents has been allowed by the Assessing Officer as per giving effect of ITAT order by Assessing Officer dated 3.7.2008 for the assessment year 2002-03. Facts of the case in the year under consideration have not changed. The depreciation @ 60% has been allowed all these years. The Assessing Officer has misdirected himself in reagitating a settled issue. Therefore I am of the opinion that digital contents classified as fixed assets by the statutory auditors in the annual s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5, the ld. DR further submitted that similarly, the ATM machines are held to be not computer or computer software in the case of HDFC Bank Ltd. (formerly) Lord Krishna Bank Ltd., Centurion Bank of Punjab Ltd.) 2011TIOL-101-ITAT-MUM order dated 07.01.2010 and it was pleaded for reversal of the order of the ld. CIT(A) and restoring that of the Assessing Officer. 6. The ld. Counsel for the assessee submitted that digital contents is a software entered in the relevant schedule refers to computer including computer software and the Hon'ble Supreme Court in the case of the assessee though under central excise matter, information technology software and document of title conveying the right to use information technology software, vide order date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer should be upheld and in alternative it was pleaded that the orders of authorities below can be set aside and matter can be remitted back on the file of the Assessing Officer for reconsideration after giving due opportunity to the assessee. 8. We have heard both the sides, considered the material on record as well as precedent relied upon by both the sides. The Assessing Officer has, in the assessment order has simply disallowed the excessive depreciation to the tune of Rs..29,59,934/-, but there is no discussion or consideration of relevant provisions in the order of the Assessing Officer. Whereas, the ld. CIT(A) has discussed and passed elaborate order without associating the Assessing Officer with such proceedings or see ..... X X X X Extracts X X X X X X X X Extracts X X X X
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