ITAT ruled on multiple taxation issues for the assessee engaged ...

Software Development Company Wins Partial Tax Relief with Key Depreciation and Investment Allowance Interpretations Under Sections 32 and 32AC

April 30, 2025

Case Laws     Income Tax     AT

ITAT ruled on multiple taxation issues for the assessee engaged in software development. The tribunal partially allowed the assessee's appeals, addressing key points: (1) computers used for software production qualify as plant and machinery eligible for additional depreciation under Section 32(1)(iia), (2) investment allowances under Section 32AC are permissible for computers used in software development, not administrative purposes, (3) suo-moto disallowance under Section 14A was accepted, (4) foreign tax deduction was allowed following precedent, and (5) MAT credit issue was remanded to Assessing Officer for fresh adjudication. The appeals were predominantly decided in favor of the assessee, with directions for detailed verification by the AO.

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