Section 32 of the Income Tax Act, 1961- Depreciation - Computer software developed or acquired on acquisition as that of its own are to be considered only as Intangible assets and allowed depreciation @25%.

Facts: CIT(A) erred in confirming the order of the lower authority restricting the grant of depreciation to 25% instead of 60% as claimed by assessee and CIT(A) ought to have noted that 'Digital Content' comprises of software that is a tangible asset. CIT (A) erred in making a distinction between 'canned' software and 'customized' software which is irrelevant to decide the issue of grant of depreciation.

Held, that computer software which have been developed or acquired on acquisition as that of its own, are to be considered only as Intangible assets and allowed depreciation @25%. The software developed by the assessee is in essence intangible property. Thus it will not fall in the categories of 'computer and softwares' indicated in Appendix-1 (Part-A) which deals only with tangible assets. - PENTAMEDIA GRAPHICS LTD. V/s DEPUTY CIT - [2020] 80 ITR (TRIB) 555 (ITAT-CHENNAI)