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Judgment
In this appeal relevant for the assessment year 1998-99, the Income Tax Appellate Tribunal (''Tribunal''), Delhi Bench "B", New Delhi in ITA No. 1097/Delhi/2002 dismissed the case set up by the revenue.
The revenue has raised four questions of law.
Insofar as questions (a), (b) and (c) are concerned, the admitted position is that in view of the decision of this court in CIT v. Woodward Governor (India) (P.) Ltd. (2007) 162 Taxman 60 (Del), no substantial question of law arises.
Insofar as question (d) is concerned, the question as raised by the revenue is as under:
Whether Income Tax Appellate Tribunal (''Tribunal'') was correct in allowing a sum of Rs. 4,50,591 being software expenses against the book profit computed u/s 115JA of the Act treating the same as revenue expenditure?
The Tribunal has come to the conclusion, and we think rightly, that the expenses incurred by the assessee on software used in its computers, is a revenue expenditure. It is well-known that the software used in computers gets obsolete in a short span of time and in any case needs to updated from time to time. It, therefore, cannot be said to be an asset of enduring nature.
Learned Counsel for the revenue has brought to our notice Section 32 of the Income Tax Act, 1961 as amended which suggests that know-how, patent, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets acquired on or after 1-4-1998 and therefore are entitled to depreciation.
The amendment to Section 32 is not retrospective and we do not see how it assists learned Counsel for the revenue.
In our opinion, no substantial question of law arises.
Dismissed.