INCOME TAX ACT, 1961

Section 32(1)

Depreciation - Depreciation on software - Disallowance on the ground of non-updation of software by the supplier -

Assessee was a consulting engineer. He claimed depreciation on software. AO disallowed assessee's claim on the ground that supplier of software namely, Infinitii informed that balance payment of Rs. 4.70 lakhs was not received by them for the reason of non replacement of software version with the latest version and as software was not updated, therefore, assessee could not have used the same.Held: The letter written by the supplier that payment was withheld for not updating the software, was not sufficient cause to disallow depreciation on software because an engineer who purchases a software can continue to use the existing version till its updation.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :

INCOME TAX ACT, 1961

Section 37(1)

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