Sec. 32 of Income-tax Act, 1961— Depreciation—Claim of depreciation allowed to assessee as CMS Software has been developed by it, owned by it and it is used for the purpose of business by updating and managing the IT Act and the other Acts and Rules published by assessee each year.

Facts: Sole issue for adjudication is with respect to the denial of claim of depreciation on the expenditure incurred on development of software and an alternative claim that alternatively, the expenditure be allowed as revenue expenditure under s. 37(1).

Held, that the issue in the present ground is with respect to the claim of depreciation on the intangible being CMS software. Assessee has given the description of the software, its functionality which was also submitted before the CIT(A) as can be noted from the order of CIT(A) wherein the contentions of the assessee have been reproduced. It is the assessee's contention that the CMS Software has been developed by it, owned by it and it is used for the purpose of business by updating and managing the IT Act and the other Acts and Rules published by assessee each year. The contention of the assessee of having owning the CMS software by it has not been controverted by the revenue. Further, the incurring of expenditure on its development has also not been disputed by the revenue and software apart from being mainly used by the assessee for its own business is also being used by it to upgrade the website of the IT department. These contentions of the learned Authorised Representative has not been controverted by revenue by placing any material on record. Further, the claim of depreciation made by the assessee in the subsequent year has not been disturbed by the revenue, therefore, we are of the view that the AO was not justified in denying the claim of depreciation under s. 32. - TAXMAN PUBLICATIONS (P) LTD. V/s ASSTT. CIT - [2020] 27 ITCD Online 036 (ITAT-DELHI)