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The investments in Indian companies which did not yielded exempt income during the year cannot be included for computing disallowance of expenditure u/s 14A read with Rule 8D of the 1962 Rules and we are restoring the matter back to the file of the AO for verification of the contentions of the assessee and to re-adjudicate the matter on merits in accordance with law.

Shanti Prime Publication Pvt. Ltd.

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)