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Income Tax Appellate Tribunal, MUMBAI BENCH “ C ”, MUMBAI
आयकर अपील�य अ�धकरण मुंबई पीठ “ सी ”,मुंबई �ी �वकास अव�थी, �या�यक सद�य एवं �ी अमरजीत �संह, लेखाकार सद�य के सम� IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “ C ”, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER& SHRI AMARJIT SINGH , ACCOUNTANT MEMBER आअसं.1128/मुं/2022 (�न.व. 2013-14) ITA NO.1128/MUM/2022(A.Y.2013-14) CRP Risk Management Limited. (Formerly Known As CRP Risk Management Private Limited), B-208/209, Classique Centre, Off. Mahalaxmi Caves Road, Andheri (East), Mumbai – 400 093 PAN: AABCC-4889-P ...... अपीलाथ�/Appellant बनाम Vs. Circle -9(2)(2) Mumbai ..... ��तवाद�/Respondent अपीलाथ� �वारा/ Appellant by : Ms. Mona Makwana ��तवाद� �वारा/Respondent by : Ms. Shreekala Pardesi सुनवाई क� �त�थ/ Date of hearing : 13/04/2023 घोषणा क� �त�थ/ Date of pronouncement : 13/04/2023 आदेश/ORDER PER VIKAS AWASTHY, JM:
This appeal by the assessee is directed against the order of Commissioner of Income Tax(Appeals)-49, Mumbai [in short ‘the CIT(A)’ ] dated 31/03/2022 for the Assessment Year 2013-14, arising out of proceedings u/s. 154 of the Income Tax Act, 1961 [in short ‘the Act’].
Ms. Mona Makwana appearing on behalf of the assessee submits, that the short issue in appeal is, restricting depreciation @25% on software namely “CRP SECURE” developed by the assessee, inhouse. The assessee had developed aforesaid software and claimed depreciation @60%. The Assessing Officer vide assessment order dated 19/02/2016 passed u/s. 143(3) of the Act accepted assessee’s claim of depreciation on software. Thereafter, the Assessing Officer initiated proceedings u/s. 154 of the Act and restricted the depreciation to 25% holding it to be an intangible asset. The ld. Authorized Representative for the assessee submits that the assessee is eligible to claim depreciation on software @60% as per the table of depreciation rates. She referred to Director’s Report at page 16 of the Paper Book to show that ‘CRP SECURE’ is a software developed by the assessee. In support of her submissions that assessee is eligible to claim depreciation @60% on computer software, placed reliance on the following decisions:
(i) Plintron Mobility Solutions Pvt. Ltd. vs. ITO in /Chny/2018, A.Y. 2014-15 decided on 27/10/2021.
(ii) Arkema Chemicals India (P) Ltd. ACIT, for A.Y. 2017-18 decided on22/04/2022.
Per contra, Ms. Shreekala Pardesi representing the Department vehemently defended the impugned order and prayed for dismissing the appeal of assessee. The ld. Departmental Representative referring to the Schedule of fixed assets at page 29 of the Paper Book submits that the assessee has shown CRP SECURE under the head “intangible asset” . The intangible assets are eligible for depreciation @25%. The Assessing Officer has rightly restricted the depreciation @25% on CRP SECURE, disclosed as an intangible asset by the assessee in its books.
We have heard the submissions made by rival sides and have examined orders of authorities below. The assessee in appeal has raised as many as five grounds, inter-alia assailing disallowance of depreciation in proceedings u/s. 154 of the Act. The ld. Authorized Representative for the assessee stated at Bar that she is not pressing ground No.2 and 3 of appeal challenging invoking of section 154 of the Act to restrict assessee’s claim of depreciation to 25%.
The short contention of the assessee is that CRP SECURE is a software developed by the assessee on which the assessee is entitled for depreciation @60%. A specific query was raised by the Bench to substantiate that CRP SECURE is a software. To this the ld. Authorized Representative for the assessee referred to the affidavit dated 23/02/2023 sworn by Hitesh Asrani Director of the company. The ld. Authorized Representative for the assessee further referred to the Director’s Report at page 16 of the Paper Book. The affidavit placed on record is a fresh evidence. We have examined the Director’s Report. A perusal of the same does not bring out clearly, whether ‘CRP SECURE’ is a software or a data bank. The Director’s Report mentions ‘ ‘CRP SECURE’ as “Employee Data Repository”. The assessee has not been able to place on record any documentary evidence to substantiate that CRP SECURE is a software developed by the assessee.
Taking into consideration entire facts, without commenting on merits we deem it appropriate to restore this issue back to the file of Assessing Officer to consider the contents of affidavit filed before the Tribunal. The assessee is granted opportunity to produce documentary evidence before the Assessing Officer to substantiate that ‘CRP SECURE’ purportedly developed by the assessee inhouse, is a software. After considering the submissions of the assessee, the Assessing Officer shall decide the issue, in accordance with the law.
In the result, appeal by the assessee is allowed for statistical purpose.