Specialised Trading Software Attracts 60% Depreciation As a Part of Computer Systems: Rules ITAT:

Specialised Trading Software Attracts 60% Depreciation As a Part of Computer Systems: Rules ITAT ITAT Delhi, in a recent case, ruled favouring the assessee and allowed the appeal, holding that specialised trading software qualifies for 60% depreciation as part of computer systems, not merely as an intangible asset, following binding judicial precedents. M/S CNB Finwiz Private Limited has filed the present appeal before the ITAT New Delhi, challenging an order dated June 13, 2025, passed by the CIT(A) under Section 250 of the Income Tax Act, 1961. The case is related to the Assessment Year 2017-18.

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The assessee is a trading company listed under NSE and BSE and is involved in high-frequency trading, which requires specialised and business-critical software. The assessee claimed depreciation at 60% on the software obtained by it. During the assessment, the Assessing Officer (AO) denied the assessee's claim and restricted the depreciation to 25%. The aggrieved assessee, when approached by the CIT(A), challenged the same. The CIT(A) sustained the decision of the AO on the grounds that the software of the assessee falls under the definition of “intangible assets” and is liable for depreciation of 25% only. The dissatisfied assessee thereafter filed an appeal before the ITAT Delhi. When the tribunal analysed the facts of the case, it observed that a similar case had also been decided in the past. The Tribunal noted that in similar cases, courts and tribunals have clearly held that software used as an integral part of computer operations is eligible for 60% depreciation.

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Since the present case is also based on a similar issue, the tribunal found no reason to take any different view. Accordingly, based on the aforementioned findings, the ITAT allowed the assessee’s appeal and directed that depreciation at 60% be allowed on the software. In conclusion, the appeal of M/s CNB Finwiz Private Limited was allowed in full.