आदेश/ORDER 

PER RAMIT KOCHAR, ACCOUNTANT MEMBER:

These two appeals filed by assessee are directed against common appellate Order dated 23.03.2015 passed by learned Commissioner of Income Tax (Appeals)-14, Chennai (hereinafter called “the CIT(A)”), in ITA No.38/11-12 & 70/13-14 CIT(A)-14 respectively , dated 23.03.2015 for assessment Years (ay’s) 2007-08 & 2009-10 respectively , the appellate proceedings before learned CIT(A) had arisen from separate assessment order(s) , for ay: 2007-08 dated 31.03.2013 passed by learned Assessing Officer (hereinafter called “the AO”) u/s.143(3) read with Section 254 of the Income-tax Act, 1961 (hereinafter called “the Act”) and secondly for ay: 2009-10 dated 15.12.2011 passed u/s 143(3) of the 1961 Act. There are common issues involved in these appeals and hence these two appeals were heard together and disposed of by this common order. These two appeals are filed late by 4 days and an petition is filed by assessee company explaining the reasons for delay in filing these appeal late by 4 days duly supported by an affidavit executed by Managing Director of the assessee company. The learned DR did not raise any serious opposition to the condonation of delay in filing this appeal late by 4 days. After considering the contentions made before us, we are condoning the delay of four days in filing this appeal late beyond time stipulated under the Income-tax Act, 1961 and admit both these appeals to be adjudicated on merits in accordance with law.

2. The grounds of appeal raised by assessee in memo of appeal(s) filed with the Income-Tax Appellate Tribunal, Chennai (hereinafter called “the Tribunal”) for ay: 2007-08 in ITA no. 1406/Chny/2015 and for ay: 2009- 10 in ITA No. 1407/chny/2015 respectively , read as under:-

“For AY 2007-08:

1. The order of the Commissioner of Income Tax (Appeals) dated 23.03.2015, is arbitrary, erroneous, incorrect and contrary to law and facts.

2. The Commissioner of Income-tax (Appeals) erred in confirming the order of the lower authority restricting the grant of depreciation to 25% instead of 60% as claimed by the Appellant.

3. The Commissioner of Income-tax (Appeals) ought to have noted that 'Digital Content' comprises of software that is a tangible asset.

4. The Commissioner of Income-tax (Appeals) erred in making a distinction between 'canned' software and 'customized' software which is irrelevant to decide the issue of grant of depreciation.

5. The Commissioner of Income-tax (Appeals) incorporates the concepts of 'canned' and 'customized' software without noting that there is no such distinction in Appendix I to the Income Tax Rules relating to the grant of depreciation.

6. The reliance of the Commissioner of Income-tax (Appeals) on various technical literature is of no relevance in deciding the present issue. In so far as the issue at hand relates to grant of depreciation on software, nothing turns on whether the software is canned or customized. In fact, the distinction between canned and customized software proceeds from the admitted position that the Digital Content is, prima facie, software, eligible for depreciation at 60% as claimed.

7. The Commissioner of Income-tax (Appeals) erred in not noting that intangible assets have been specifically defined under Part D of the Appendix to the Income Tax Rules as being knowhow, patent, copyright, trade mark, license or commercial rights of similar nature. On the other hand, Appendix I of the Income Tax Rules clarifies in Note 7 thereof that Information Technology Software is eligible for depreciation @ 60%. There is thus no scope or justification in confusing tangible and intangible assets that have been demarcated clearly.

8. The Commissioner of Income-tax (Appeals) erred in relying upon various judgments of Foreign Courts to conclude that software is an intangible asset. He ought to have followed the law laid down by the Supreme Court in the case of Tata Consultancy Services vs. State of Andhra Pradesh to the effect that compute