Adarsh Kumar Goel, J. - (1.) THE Revenue has preferred this appeal under Section 260A of the Income Tax Act, 1961 (in short, "the Act"), against the order of the Income Tax Appellate Tribunal, Chandigarh Bench "B", Chandigarh, passed in I. T. A. No. 138/Chandi/2006, dated April 24, 2007, for the assessment year 2002 -03, proposing to raise the following substantial question of law: Whether, on the facts and in law, the hon'ble Income Tax Appellate Tribunal was justified in holding that computer software expenses were revenue in nature, disregarding the meaning of plant under Section 43(3) and the fact that enduring advantage was derived by the assessee by incurring such expenditure?
(2.) THE assessee claimed deduction in respect of amounts spent on software, which was disallowed by the Assessing Officer. The Commissioner of Income Tax (Appeals) upheld the claim of the assessee, which has been affirmed by the Income Tax Appellate Tribunal. The finding recorded by the Tribunal on the question proposed to be raised is as under:
(3.) IN regard to the third ground of appeal, it is stated that the issue is covered in favour of the assessee by the decision of the Tribunal in the case of M/s. Abhishek Industries Limited, I.T.A. No. 395/Chandi/2006, assessment year 2001 -02. The relevant discussion relating to this issue is in paragraph 4, which is reproduced here -under: 4. The next issue raised by the Revenue pertains to deleting the addition of Rs. 4,00,936 on account of depreciation on computer software expenses. The contention of the learned Departmental representative is that the expenditure on acquisition of software is a capital expenditure. However, the learned authorised representative contended that this issue is covered in favour of the assessee by the decision of the Tribunal in the case of Bank of Punjab Limited v. Joint CIT I.T.A. No., 340 Chd 2001. We have considered the rival submissions. The conclusion of the Tribunal is available in paragraph 12.1 (order dated August 28, 2001) wherein it was held to be of revenue nature. No contrary decision has been brought to our notice by the Revenue. Consequently, the ground of the Revenue is also having ho merit. Respectfully following the aforementioned decision, we uphold the decision of the Commissioner of Income Tax (Appeals) in regard to the treatment of software expenses as revenue expenditure and in deleting the addition of Rs. 30,15,972. Accordingly, the ground raised by the Revenue is dismissed. 4. Learned Counsel for the Revenue is not aware about the status of the decision of the Tribunal in Bank of Punjab Limited, which has been followed in the impugned order.;