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TMI Blog2023 (2) TMI 590X X X X Extracts X X X X X X X X Extracts X X X X ..... d depreciation at the rate of 60%, noted in the order of the AO at para-3 is that, it related to SAP products which the AO noted was a customized licensed product. The assessee had incurred expenditure to the tune of Rs.17,30,28,684/-on purchase of the said SAP product and claimed depreciation at the rate of 60% thereon which was reduced to 25% by the AO holding that the application software being licensed was an intangible asset, and accordingly, depreciation at the rate of 25% was applicable to it. The ld.CIT(A) allowed the claim of the assessee of 60% depreciation thereon following order of the ITAT in the assessee's own case for Asst.Year 2010-11 to 2012-13. The findings of the ld.CIT(A) at para 5.1 of the order in this regard is as under: "5.1 The Id.AR in the course of appellate proceedings filed copies of the orders of Hon'ble ITAT in appellant's own case in ITA No.124/Ahd/2017, 162/Ahd/2016, 1468/Ahd/2016 & 1923/Ahd/2016 DCIT vs. Vodafone Shared Services Ltd.(earlier name of appellant), A.Ys.2012-13, 2010-11 & 2011-12. On the very same issue wherein the Hon'ble ITAT have dismissed the departmental appeal vide Para 2.3 of their decision which is reproduced as b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ai Bench in the case of Pentamedia Graphics Ltd. Vs. DCIT, 116 taxmann.com 564 (Chennai-Trib); copy of the order was placed before us. 5. The ld.counsel for the assessee countered by stating that this distinction between application software and systems software was of no relevance at all, and he pointed out that Hon'ble Madras High Court in the case of CIT Vs. Computer Age Management Services P.Ltd., 109 taxmann.com 134 (Mad) had categorically held that all computer software of whatever nature, as long as they qualify in the definition of computer software products as appearing in Appendix-I to the Income Tax Rules, 1962, wherein they have defined to mean any programme recorded on CD or disc, tape, perforated media or other information storage devices ,qualified as computer software for the purpose of claiming depreciation at the rate of 60%. He drew our attention to para-4 to 12 of the order as under: "4. The assessee is engaged in the business of registrar and transfer agent licensed by the Security Exchange Bureau of India (SEBI) (sic). In these appeals, two issues are raised by the Revenue for consideration. The first issue, which is common for all the assessment years, is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of the Revenue is that software are licences and that they are intangible assets and would fall under Part B of New Appendix I, which deals with knowhow, patents, copyrights, trademarks, licenses, francises or any other business or commercial rights of similar nature. 10. We find that Part B of New Appendix I is a general entry whereas Entry 5 of Part A of New Appendix I is a specific entry read with Note 7. In the instant case, the Tribunal, in our considered view, rightly held that the assessee is eligible to claim depreciation at 60%. 11. In the decision rendered by a Division Bench of this Court in the case of CIT v. Cactus Imaging India (P.) Ltd. [20181 93 taxmann.com 396/256 Taxman 32/406 ITR 406 (Mad.) to which, one of us (TSSJ) was a party, an identical question came up for consideration wherein the object was printer (computer printer). This Court, after taking into consideration as to how the entries would be interpreted, referred to the decision in the case of Bimetal Bearings Ltd. v. State of Tamil Nadu [1991] 80 STC 167 (Mad.) and held as hereunder : "9. The Hon'ble Division Bench took note of the decision of the Hon'ble Supreme Court pointing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale to other parties. He pointed out that ITAT, Ahmedabad Bench in the case of assessee itself had held that license to software was eligible for depreciation at the rate of 60%. He further drew our attention to the decision of the ITAT in the case of ACIT(OSD) Vs. Voltamp Transformers Ltd., ITA No.1676/Ahd/2012 order dated 23.3.2013 wherein while dealing with identical issue, the ITAT had held computer software to be eligible at the rate of 60% without any distinction between system software and application software. Copy of the decision was placed before us. 7. We have heard rival contentions and have gone through the orders of the authorities below. We see no reason to interfere in the order of the Ld.CIT(A) allowing assesses claim of depreciation on licensed software @ 60%. Undeniably assesses claim to 60% depreciation on this software in the preceding years, A.Y 2010-11 to 2012-13, has been consistently upheld by the ITAT. The Ld.DR has sought to distinguish the said decisions pointing out that the claim has been allowed following the ratio laid down by the ITAT in the case of Zydus Infrastructure(supra) wherein the claim related to depreciation on systems software ,while in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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