The Tax Publishers2020 TaxPub(DT) 5508 (Karn-HC) : (2021) 278 TAXMAN 0162

INCOME TAX ACT, 1961

Section 32(1) Section 40(a)(ia)

Court was not inclined to accept the submission made by the assessee that in paragraph 38, the issue of royalty had been dealt with. The High Court therefore, remanded the matter of depreciation claimed on software to the Tribunal to decide afresh by taking into account the decision rendered in Wipro Ltd. accordingly, the substantial question of law was answered.

Depreciation - Allowability - Depreciation on software treated as royalty under section 40(a)(ia) -

Revenue had contended that the AO had rightly disallowed the depreciation claimed on software, which was treated as royalty under section 40(a)(ia) on the ground that decision of this Court in Wipro Ltd. ITA No. 507/2002, dated 25-8-2010 does not deal with the issue of royalty. From perusal of the aforesaid decision, the Tribunal had decided the aforesaid issue in favour of the assessee by placing reliance on its previous order, which was upheld in Wipro Ltd. Held: Thus, the substantial question of law involved in the aforesaid appeal was different and therefore, with reference to the aforesaid judgment, issue with regard to depreciation claimed on software, which was treated as royalty under section 40(a)(ia) could not have been decided by the Tribunal. Court was not inclined to accept the submission made by the assessee that in paragraph 38, the issue of royalty has been dealt with. The Court therefore, remanded the matter of depreciation claimed on software to the Tribunal to decide afresh by taking into account the decision rendered in Wipro Ltd. Accordingly, the substantial question of law was answered.

Followed:Wipro Ltd. ITA. No. 507/2002, dated 25-8-2010 . Relied:Wipro Ltd. v. Dy. CIT 383 ITR 179 (Karn) : 2016 TaxPub(DT0 327 (Karn-HC), CIT & Anr. v. Tatasi Ltd. (2016) 382 ITR 654 (Karn) : 016 TaxPub(DT0 1680 (Karn-HC) and CIT v. HCL Technologies Ltd. (2018) 404 ITR 719 (SC) : 2018 TaxPub(DT) 2138 (SC).

REFERRED :

FAVOUR : Matter remanded.

A.Y. : 2008-09


INCOME TAX ACT, 1961

Section 10A Section 72

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