“computer software”

Chapter III - Incomes Not IncludedSection 10BSection 10B Explanation 2 / Section 80HHF951 judgments

The decision most relied on for computer software is Engineering Analysis Centre of Excellence (P) Ltd. v. CIT (432 ITR 471), cited in 914 judgments on BharatTax.

Leading authorities on computer software

Engineering Analysis Centre of Excellence (P) Ltd. v. CIT

432 ITR 471 · 2021 · Supreme Court

914

citing judgments

Payments for the supply or use of computer software, where there is no transfer of copyright but only a right to use the copyrighted product, are generally considered business profits and not 'royalty' or 'fees for technical services' under the Income Tax Act, 1961 or relevant DTAAs. This principle also applies to transponder fees, which are not taxable as royalty.

CIT v. Samsung Electronics Ltd.

345 ITR 494 · 2012 · High Court

461

citing judgments

Payments by Indian residents to non-resident foreign software suppliers for software are considered royalty, constituting income deemed to accrue in India under section 9(1)(v), thereby requiring tax deduction at source under section 195.

DIT v. Infrasoft Ltd.

39 Taxmann.com 88 · 2013 · High Court

269

citing judgments

Payments for the use of copyrighted software, without the transfer of any rights in the underlying copyright itself, do not constitute 'royalty' under the Income-tax Act or tax treaties. Such payments are often treated as business income, taxable only if a permanent establishment exists.

III v. HCL Technologies Ltd.

93 Taxmann.com 33 · 2018 · Supreme Court

245

citing judgments

When computing the deduction available under Section 10A of the Income-tax Act, communication expenses must be excluded from the total turnover for the purpose of calculating the eligible relief.

CIT v. Synopsis International Old Ltd.

212 Taxmann 454 · 2013 · High Court

177

citing judgments

Payments for computer software are treated as royalty income under Section 9(1)(vi) of the Income-tax Act, particularly concerning the expanded definition provided by Explanation 2 and Explanation 4.

CIT v. Asahi India Safety Glass Ltd.

346 ITR 329 · 2012 · High Court

129

citing judgments

Expenses incurred for software license purchase, development of miscellaneous software, and maintenance of websites are considered revenue in nature. Such expenses are deductible in the year they are incurred.

Amway India Enterprises v. DCIT

111 ITD 112 · 2008 · ITAT

127

citing judgments

Depreciation is allowable on computer software, including software licenses, at the rate of 60%.

Kotak Mahindra Primus Ltd. v. DDIT

11 SOT 578 · 2007 · ITAT

citing judgments

Payments for data processing services using a mainframe computer and specialized software are not taxable as fees for the use of equipment if the Indian entity lacks independent rights or physical access to use the computer or software.

Judgments citing computer software

Infosys Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle-3(1)(1), Bangalore

Accordingly, the appeal filed by the assessee is also allowed for statistical purposes

ITA 1531/BANG/2024[2020-21]Status: DisposedITAT Bangalore06 Aug 2025AY 2020-21

Bench: Shri Waseem Ahmed & Shri Keshav Dubey

For Appellant: Sri Padam Chand Khincha – CAFor Respondent: Smt Srinandini Das – CIT - DR

Section 10ASection 143(3)Section 234BSection 250

allowed.” 4. Brief facts of the case are that the assessee is an Indian Company engaged in the business of development and export of computer software. Original return of income for AY 2020-21 was filed on 14-02-2021 declaring a total income ... units which are eligible for deduction under section 10AA of the Act. These SEZ units are into the business of development and export of computer software. The said business has given rise to profits and gains from export of computer software and other incidental and ancillary incomes derived

Infosys Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle-3(1)(1), Bangalore

In the result, appeal filed by the assessee is allowed for statistical purposes

ITA 1530/BANG/2024[2013-14]Status: DisposedITAT Bangalore06 Aug 2025AY 2013-14

Bench: Shri Waseem Ahmed & Shri Keshav Dubeyassessment Year : 2013-14

For Appellant: Sri Padam Chand Khincha – CAFor Respondent: Smt Srinandini Das – CIT - DR

Section 10ASection 143(3)Section 250Section 254Section 80A(5)

allowed.” 3. Brief facts of the case are that assessee is an Indian Company engaged in the business of development and export of computer software. For the AY 2013-14, the original return of income was filed on 30.11.2013 declaring a total income of Rs. 8501,13,54,830/-. Further ... interest of bank deposits, interest from sister concerns, as the funds for such purposes were generated from the business of the export of computer software. The deduction under section 10AA is similar to deduction under section 10A and thus in our opinion the judgements in the above cases will squarely

Infosys Limited, Bangalore vs. Deputy Commissioner of Income-Tax, Circle-3(1)(1), Bangalore

ITA 881/BANG/2023[2019-20]Status: DisposedITAT Bangalore06 Aug 2025AY 2019-20

Bench: Shri Waseem Ahmed & Shri Keshav Dubey

Section 1Section 10ASection 155Section 250

brief facts of the case are that the assessee is an Indian Company engaged in the business of development and export of computer software. The Original return of income for AY 2019-20 was filed on 29.11.2019 declaring total income of Rs.12605,13,60,050/-. Subsequently, the assessee company filed

Dy..C.I.T., Bangalore vs. M/S State Bank of Mysore, Bangalore

In the result, the appeal of the Revenue Ground-3 is dismissed

ITA 683/BANG/2015[2010-11]Status: DisposedITAT Mumbai05 Aug 2025AY 2010-11

Bench: Shri Narendra Kumar Billaiya, Account Member & Shri Anikesh Banerjee

For Appellant: Shri Ketan Ved & Ninad PatadeFor Respondent: Shri P.C. Chhotaray, Spl. Counsel

Section 143(3)Section 250Section 36(1)(vii)Section 36(1)(viia)Section 41(1)Section 41(4)

Appellant has already furnished more than 60% of the total invoices/bills in support of the additions to fixed assets under the block "computers and computer software". b) The learned CIT(A) erred in upholding the order of the learned AO disallowing depreciation on balance of the additions to fixed assets ... under the block "computers and computer software" for which the Appellant could not furnish bills/invoices. c) The learned CIT (A) ought to have placed reliance on the additions to fixed assets as per the Tax audit report and the audited financials and allowed depreciation @ 60% on those additions, conducted

State Bank of Mysore, Bangalore vs. JCIT, Bangalore

In the result, the appeal of the Revenue Ground-3 is dismissed

ITA 660/BANG/2015[2010-11]Status: DisposedITAT Mumbai05 Aug 2025AY 2010-11

Bench: Shri Narendra Kumar Billaiya, Account Member & Shri Anikesh Banerjeestate Bank Of India Vs Joint Commissioner Of Income-Tax, (Erstwhile State Bank Of Large Tax Payers Unit, Bangalore Mysore Prior To Merger) Local Head Office Compliance Department, 4Th Floor, 65, St. Marks Road, Bangalore-560 001 Pan: Aaccs0155P Appellant Respondent Deputy Commissioner Of Vs State Bank Of Mysore Income-Tax, Ltu, Circle-1, Head Office, Finance & Accounts Bangalore Department, Kg Road, Bangalore- 560 009 Pan: Aaccs0155P Appellant Respondent

For Appellant: Shri Ketan Ved & Ninad PatadeFor Respondent: Shri P.C. Chhotaray, Spl. Counsel

Section 143(3)Section 250Section 36(1)(vii)Section 36(1)(viia)Section 41(1)Section 41(4)

Ernst & Young U.S. LLP, Noida vs. Assistant Commissioner of Income Tax, Circle International Tax 1(2)(2), New Delhi

In the result, bot the appeals of the assessee stand allowed

ITA 1254/DEL/2025[2018-19]Status: DisposedITAT Delhi31 Jul 2025AY 2018-19

Bench: Shri Prakash Chand Yadav & Shri Naveen Chandraita No.1243/Del/2025 (Assessment Year 2022-23) Ernst & Young U.S. Llp Acit, Circle, C/O Authorized Representative, International Tax- Ernst & Young Llp, Vs. 1(2)(2), New Delhi. 5Th Floor, Tower-2, Plot No.2B, Sector-126, Noida, Gautam Budh Nagar (U.P.)-201304. Pan-Aadfe0355M (Appellant) (Respondent) Assessee By Shri S. Ganesh, Sr. Adv. & Ms. Ananya Kapoor, Adv. Department By Shri Nikhil Kumar Govila, Cit-Dr Date Of Hearing 17/07/2025 Date Of Pronouncement 31/07/2025 O R D E R Per Bench: The Present Appeals Of The Assessee Are Arising Out From The Order Of Ld. Assessing Officer Dated 18Th December, 2024 & 12Th December, 2024 & Relates To Assessment Year 2018-19 & Assessment Year 2022-23 Respectively.

Section 139(4)

ACIT singers etc and all persons in the profession of information technology including persons practicing data entry and rendering all kinds of computer software and hardware services. Further, the notification dated 21/8/2008 includes in the term "professionals all sports persons such as coaches, referees, commentators and sports columnists. This

Ernst & Young U.S. LLP, Noida vs. Assistant Commissioner of Income Tax, Circle International Tax 1(2)(2), New Delhi

In the result, bot the appeals of the assessee stand allowed

ITA 1243/DEL/2025[2022-23]Status: DisposedITAT Delhi31 Jul 2025AY 2022-23

Section 139(4)

Deputy Commissioner of Income Tax, Jhandewalan Extn vs. Indian Potash Limited, Chennai

In the result, the appeal filed by the Revenue is dismissed and appeal filed by the assessee is allowed

ITA 4578/DEL/2024[2018-19]Status: DisposedITAT Delhi23 Jul 2025AY 2018-19

Bench: Shri S. Rifaur Rahman & Shri Vimal Kumarindian Potash Limited, Vs. Dcit, Central Circle 1, 1St Floor, Seethakathi Business Centre, New Delhi. 684 – 690, Anna Salai Thousand Lights, Chennai – 600 006 (Tamil Nadu). (Pan : Aaaci0888H) Dcit, Central Circle 1, Vs. Indian Potash Limited, 1St Floor, Seethakathi Business Centre, New Delhi. 684 – 690, Anna Salai Thousand Lights, Chennai – 600 006 (Tamil Nadu). (Pan : Aaaci0888H) (Appellant) (Respondent) Assessee By : Shri Akshat Jain, Ca Shri Rajat Jain, Ca Revenue By : Shri Dayainder Singh Sidhu, Cit Dr Date Of Hearing : 05.06.2025 Date Of Order : 23.07.2025 O R D E R Per S.Rifaur Rahman: 1. These Cross Appeals Are Filed By The Assessee & Revenue Against The Order Of Ld. Commissioner Of Income-Tax (Appeals), Delhi – 23 [Hereinafter Referred To As ‘Ld. Cit (A)] Dated 10.07.2024 For Assessment Year 2018-19. 2. The Revenue Has Raised The Following Grounds Of Appeal :- “1. The Order Of Ld. Cit (A) Is Not Correct In Law & Facts. 2. Whether On The Facts & Circumstances Of The Case Ld. Cit (A) Is Justified In Deleting The Addition Of Rs.88,67,868/- On Account Of Disallowance Of Excess Depreciation Claimed On Pos Machine. 3. Whether On The Facts & Circumstances Of The Case Ld. Cit (A) Is Justified In Deleting The Addition Of Rs.70,55,840/- On Account Of Disallowance Of Excess Depreciation Claimed On Sap License. 4. Whether On The Facts & Circumstances Of The Case Ld. Cit (A) Is Justified In Deleting The Addition Of Rs.9,71,46,262/- On Account Of Disallowance Of Excess Bad Debt Claimed On Which The Company Is Not Eligible For Taking The Benefit Of Claiming Of Subsidy By The Government Of India For Violation Of Subsidy By The Government Of India For Violation Of Norms Set By The Ministry Of Chemical & Fertilizers.”

For Appellant: Shri Akshat Jain, CAFor Respondent: Shri Dayainder Singh Sidhu, CIT DR

Section 36(1)(vii)Section 36(2)

also relied upon the various case laws and submitted a case law compilation wherein it is held that SAP License being a computer software is eligible for depreciation @ 60% or 40%. 8. Considered the rival submissions and material placed on record. We observe that the issue under consideration is already

Indian Potash Limited, Chennai vs. Deputy Commissioner of Income Tax, Central Circle - 1, New Delhi

In the result, the appeal filed by the Revenue is dismissed and appeal filed by the assessee is allowed

ITA 4113/DEL/2024[2018-19]Status: DisposedITAT Delhi23 Jul 2025AY 2018-19

For Appellant: Shri Akshat Jain, CAFor Respondent: Shri Dayainder Singh Sidhu, CIT DR

Section 36(1)(vii)Section 36(2)

Edenred Pte Ltd, Mumbai vs. DCIT Int. Taxational 2(2)(1), Mumbai

In the result, the appeal by the assessee is allowed

ITA 749/MUM/2025[2022-23]Status: DisposedITAT Mumbai17 Jul 2025AY 2022-23

Bench: Shri Vikram Singh Yadavshri Sandeep Singh Karhailedenred Pte Ltd., C/O. Walker Chandiok & Co. Llp, 16Th Floor, Tower Lll, One International Center, S B Marg, Prabhadevi (West), ............... Appellant Mumbai-400013. Pan : Aacce8636P V/S Deputy Commissioner Of Income Tax – International Taxation -2(2)(1), Room No. 606, 6Th Floor, ……………… Respondent Kautilya Bhavan, G Block, Bandra Kurla Complex, Bandra (East), Mumbai – 400051. Assessee By : Shri Jitendra Singh/Ms. Shivali Mhatre Revenue By : Shri Krishna Kumar, Sr.Dr

For Appellant: Shri Jitendra Singh/Ms. Shivali MhatreFor Respondent: Shri Krishna Kumar, Sr.DR

Section 142(1)Section 143(2)Section 143(3)Section 144C(5)

Edenred Pte Ltd. 13 ITA Nos. 1718/M/2014 254/M/2015 & 507/M/2016 'royalty' in Article 12.3, (viii) there is no transfer of any copyright in the computer software provided by AXA ARC and it cannot be said that the applicant has been conferred any right of usages of the equipment located abroad, more

Ivy Software Development Services Private Limited, Hyderabad vs. DCIT, Circle -2(1), Hyderabad

In the result, the ground no

ITA 73/HYD/2022[2017-18]Status: DisposedITAT Hyderabad16 Jul 2025AY 2017-18

Bench: Shri Vijay Pal Rao & Shri Madhusudan Sawdia

For Appellant: Shri Nageswar Rao, AdvocateFor Respondent: Shri B. Bala Krishna, CIT-DR

Section 143(2)Section 143(3)Section 144C(5)

engaged in providing product design and engineering services to different segments of business. The company generates 92.04% revenue from design and development of computer software and hardware. Further the company had also incurred substantial amount for in-house R and D project which is supported by technology partnerships, subscriptions ... order of Ld. DRP and page no.1499 of the paper book, wherein the disclosure of principal product/services by e-infochips is stated as “computer software development services other than programming services, including embedded system development services.” He submitted that the assessee is engaged only in coding, i.e., routine SDS, whereas

ACIT, Ltu-2, Chennai vs. Ashok Leyland Limited, Chennai

In the result, appeal filed by the assessee is partly allowed and the appeal of the Revenue is dismissed

ITA 2618/CHNY/2019[2015-16]Status: DisposedITAT Chennai07 Jul 2025AY 2015-16

Bench: Shri Aby T. Varkey & Shri Amitabh Shukla

For Appellant: Mr.R. Vijayaraghavan, AdvFor Respondent: Mr.A. Sasikumar, CIT

Section 115JSection 143(3)Section 14A

Date, as a going concern including: a. all the moveable assets, properties, resources, facilities, utilities, and services including without limitations, all computers, work stations, computer software, plant, equipment, machinery, apparatus, instruments, spare, tools, furniture and fixtures, office equipment, communication facilities and capital work-in-progress and such other tangible movable

Salesforce.Com Singapore Pte. Ltd., Singapore vs. The Assistant Commissioner of Income-Tax, International Taxation, Circle-3(1)(2), New Delhi

ITA 2119/DEL/2025[2022-23]Status: DisposedITAT Delhi04 Jul 2025AY 2022-23

Bench: Shri Challa Nagendram Prasad & Shri Naveen Chandra

For Respondent: Shri Siddharth Bhim Singh Meena, CIT-DR

Section 143(2)Section 195Section 9

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘D' BENCH, NEW DELHI BEFORE SHRI CHALLA NAGENDRAM PRASAD, JUDICIAL MEMBER, AND SHRI

Pokharna Educational Trust, Pune vs. CIT (Exemption), Pune

In the result, appeal of the assessee is dismissed

ITA 1244/PUN/2025[2020-21]Status: DisposedITAT Pune30 Jun 2025AY 2020-21

Section 10Section 10(23)Section 10(230)(iad)Section 12ASection 143(3)Section 263Section 57

23iv) 29 Advertisement 3970 43 Donation 5000 47 1 Bank Charges 2132 2 Cleaning Expenses 19520 3 Tea, Food & coffee Expenditure 20480 4 Computer Software Expenses 7000 5 Depreciation 363063 6 Office Expenses 23750 7 Newspaper expense 499 8 Sundry expense 460 9 School Building Fund Expense 6400000 Total ... reproduced here as under : Schedule for B) Educational Expenses PARTICULARS AMT (RS.) Advertisement 3,970 Bank Charges 2,312 Cleaning Expenses 19,520 Computer Software Expenses 7,000 Depreciation 3,63,063 Donation 50,000 Newspaper expenses 499 Office Expenses Teacher & Staff Salary Staff Insurance

DCIT(It)-3(2)(2), Mumbai vs. Murex Southeast Asia Private Limited, Singapore

The appeal of the Revenue is dismissed

ITA 1453/MUM/2025[2014-15]Status: DisposedITAT Mumbai30 Jun 2025AY 2014-15

Bench: Ms Padmavathy S, Am & Shri Raj Kumar Chauhan, Jm

Section 250Section 271(1)(c)

said judgment has. inter-alia, held that the payments by Indian end-users to non-resident suppliers, as consideration for use of the computer software is not in the nature of Royalty for use of copyright in the computer software and does not give rise to any income taxable

Vivrn Foods Pvt. Ltd., Raipur vs. Income Tax Officer, Ward-1(2), Raipur

In the result, appeal of the assessee is dismissed

ITA 364/RPR/2025[2024-25]Status: DisposedITAT Raipur25 Jun 2025AY 2024-25

Bench: Shri Partha Sarathi Chaudhury & Shri Arun Khodpiaआयकर अपील सं. / Ita No.364/Rpr/2025 "नधा"रण वष" / Assessment Year : 2024-25 Vivrn Foods Private Limited C/O. Rajkumar Mundra, Village-Sarona, Raipur-492 009 (C.G.) Pan: Aahcv4005G

For Appellant: Shri S.R. Rao, AdvocateFor Respondent: Dr. Priyanka Patel, Sr. DR

Section 115BSection 139Section 139(1)Section 143(1)

business of manufacture or production of any article or thing referred to in clause (b) shall not include business of,— (i) development of computer software in any form or in any media; (ii) mining; (iii) conversion of marble blocks or similar items into slabs; (iv) bottling of gas into cylinder

Ankit Umeshkumar Shah, Ahmedabad vs. The Income Tax Officer, Ward-1(2)(1), Ahmedabad

In the result, appeal filed by the assessee is allowed for statistical purposes

ITA 1815/AHD/2024[2017-18]Status: DisposedITAT Ahmedabad20 Jun 2025AY 2017-18

Bench: PER SMT. ANNAPURNA GUPTA (Accountant Member)

For Appellant: Shri M S Chhajed, A.RFor Respondent: Shri Prasad Rao Waghe Annasaheb

Section 250Section 37Section 68

account maintained with State Bank of India, Nr. Dharnidhar Derasar, Ahmedabad. Marking this to be a suspicious activity based on risk paramateres applied by computer software used by CBDT for selection of case for scrutiny under CASS, the case of assesse was selected for complete scrutiny. Various notices were issued

DCIT 2 2 1, Mumbai vs. M S Luvish Infotech Projects Private Limited, Mumbai

In the result, the appeal filed by the revenue bearing ITA

ITA 815/MUM/2025[2012-13]Status: DisposedITAT Mumbai17 Jun 2025AY 2012-13

Bench: Shri Vikram Singh Yadav & Shri Anikesh Banerjeedcit (2)(2)(1), Mumbai Vs M/S Luvish Infotech Projects 5Th Room No.545, Floor, Private Limited, Aayakar Bhavan, M.K. Road, Cts 102/2, Sani Armaa, Raut Lane, Mumbai-400 020 Juhu, Vile Parle West, Mumbai-400 049 Pan : Aadcm4966H Appellant Respondent

For Appellant: Shri Shobhit Mishra & Mr. Mahaveer JainFor Respondent: Shri Annavaram Kosuri SR.AR

Section 143(3)Section 14ASection 14A(1)Section 250Section 72

were received from letting out the industrial park, a commercial asset developed by the assessee along with rental from the activities of computer hardware, computer software and allied industrial activities? 2. Whether in the facts and circumstances of the case and in law, the Ld. CIT(A) justified in treating ... were received from letting out the industrial park, a commercial asset developed by the assessee along with rental from the activities of computer hardware, computer software and allied industrial activities? 4. Whether in the facts and circumstances of the case and in law, the Ld. CIT(A) justified

Siemens Aktiengesellschaft, Mumbai vs. DDIT (It) 2(1), Mumbai

In the result, grounds No

ITA 7779/MUM/2012[2008-09]Status: DisposedITAT Mumbai16 Jun 2025AY 2008-09

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI OMKARESHWAR CHIDARA (Accountant Member)

Section 143(3)Section 234BSection 271(1)(c)Section 271G

Supreme Court vide its order grouped various appeals before it into following four categories: - The first category deals with cases in which computer software is purchased directly by an end-user, resident in India, from a foreign, non-resident supplier or manufacturer. - The second category of cases deals with resident ... Indian companies that act as distributors or resellers, by purchasing computer software from foreign, non-resident suppliers or manufacturers and then reselling the same to resident Indian end- users. - The third category concerns cases wherein the distributor happens to be a foreign, nonresident vendor, who, after purchasing software from

M/S. Genpact India, Gurgaon vs. DCIT, New Delhi

In the result, the appeal of the Revenue is dismissed and the appeal filed by the assessee is partly allowed

ITA 6543/DEL/2016[2013-14]Status: DisposedITAT Delhi13 Jun 2025AY 2013-14

Bench: SHRI S.RIFAUR RAHMAN (Accountant Member), SHRI ANUBHAV SHARMA (Judicial Member)

For Appellant: Shri Tarandeep Singh, AdvocateFor Respondent: Shri Kailash Dan Ratnoo, CIT DR

Section 10ASection 14A

attributable to the delivery of the articles or things outside India or expenses, if any, incurred in foreign exchange in rendering of services (including computer software) outside India” 11.2 He further submitted that a perusal of the said definition clearly shows that it is only when such expenses are included