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| The Tax Publishers2020 TaxPub(DT) 2872 (Del-Trib) INCOME TAX ACT, 1961
Section 32
Where assessee-company engaged in business of publication of books on taxation, corporate laws claimed depreciation on its Content Management Software (CMS), AO was not justified in denying same on allegation that software was not owned by it because incurring of expenditure on development of software was not disputed by revenue and software apart from mainly used by assessee for its own business was also used by it to upgrade website of Income tax Department.
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Depreciation - Allowability - Depreciation on 'Content Management Software' (CMS) -
Assessee-company was engaged in business of publication of books on taxation, corporate laws and trading in software. Assessee was aggrieved by disallowance of depreciation claimed on webmaster software for which assessee failed to satisfy test of ownership for claiming depreciation. Held: Assessee gave description of software, its functionality which was also submitted before CIT(A). Assessee's contention was that Content Management Software (CMS) software was developed by it, owned by it and it was used for purpose of business by updating and managing Income Tax Act and the other Acts and rules published by assessee each year. Contention of assessee of having owning the CMS software by it was not controverted by revenue. Incurring of expenditure on its development was also not disputed by revenue. Software apart from being mainly used by assessee for its own business was also being used by it to upgrade website of Income tax Department. Claim of depreciation made by assessee in subsequent year was not disturbed by revenue. Thus, AO was not justified in denying depreciation claim.
REFERRED : National Thermal Power Company Ltd. v. CIT (1998) 229 ITR 383 (SC) : 1998 TaxPub(DT) 0342 (SC).
FAVOUR : In assessee's favour.
A.Y. : 2015-16
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