“Section 32(1)(vi)”

Expenditure on application software, which enhances business efficiency and requires a computer system to function, constitutes revenue expenditure rather than acquisition of a capital asset, even if it provides an enduring benefit.

Section 40(a)(i)/(ia) of the Income Tax Act, 1961, pertains to outgoing revenue expenditure and does not apply to capital expenditure, meaning depreciation cannot be disallowed under these provisions for capital expenses, such as software purchases.

Amounts referred to under section 40(a)(ia) of the Income-tax Act, 1961, are not deductible in computing income chargeable under the head 'Profits and gains of business or profession'.

Depreciation on intangible assets like computer software is limited to 25% as per Section 32 of the Income Tax Act, and higher rates are contrary to the decision in Dinamalar v. CIT.