The Income Tax Appellate Tribunal (ITAT), while upholding the decision of the CIT(A) held that on computers and computer software assessee is eligible for deduction 60%.
The assessee, Indiabulls Ventures Ltd. is a company engaged in the business of stock and shares brokers of NSE and BSE. It filed its return of income. The assessment under Section 143(3) of the Act was passed determining the total income of the assessee at Rs. 3,60,98,880/- wherein, the AO disallowed the excess depreciation claim on the software of Rs. 6871008/-.
The issues raised in this case was whether, on the facts and circumstances of the case & in law, the Ld CIT(A) erred in deleting the provision of excess depreciation of Rs. 68,71,008/- ignoring the fact that the disallowance of excess depreciation was not crystallized during the year under consideration.
The tribunal consisting of a Judicial Member Sudanshu Shrivastava and a Technical Member Prashant Maharishi while upholding the decision of the CIT(A) held that on computers and computer software assessee is eligible for deduction 60%. However, for working out the actual block of assets on which depreciation is to be allowed, and directed the AO to verify the same.
“Directions are not warranted pertaining to earlier years for the reason that Ld CIT (A) does not have any power to direct Ld AO for allowability of such claim for earlier years. If assessee wishes to claim, there is no fetter on the right of the assessee, but the claim should be in accordance with the law. If the assessee makes a claim for deduction of balance expenditure in earlier years, whenever such a claim is made, the Ld AO may examine the same and decide the issue on merits in accordance with the law. To that extent, the direction of the Ld CIT (A) to the Ld AO is required to be modified. Other than what is indicated above, we do not find any infirmity in the order of the Ld CIT (A),” the tribunal directed.To Read the full text of the Order CLICK HERE