Ltd., 21/35, New Rohtak Circle 25 (1) Road, West Punjabi Bagh, New Delhi New Delhi 110 026 PAN No. AAACT 2774 P (APPELLANT) (RESPONDENT) Appellant by Shri Gaurav Jain & Ms. Manisha Sharma, Adv. Respondent by Shri Saras Kumar, Sr. D.R. Date of hearing: 01/07/2020 Date of Pronouncement: 08/07/2020 ORDER PER ANIL CHATURVEDI, AM: This appeal filed by the assessee is directed against the order dated 08.02.2019 of the Commission of Income Tax (A)27, New Delhi relating to Assessment Year 201516. 2. The relevant facts as culled from the material on records are as under: ITA No.2762/Del/2019 Taxman Publications Pvt. Ltd. vs. ACIT A.Y. 201516 2 3. Assessee is a company which is stated to be engaged in the business of publication of books on taxation corporate laws and trading in software. Assessee electronically filed its return of income for A.Y. 201516 on 27.11.2015 declaring total income of Rs.69,03,560/. The case was selected for scrutiny and thereafter assessment was framed u/s 143(3) of the Income tax Act, 1961, vide order dated 14.11.2017 and the total income was determined at Rs.1,14,53,530/. Aggrieved by the order of AO, assessee carried the matter before the CIT(A) who vide order dated 08.02.2019 (in Appeal No.339/1819) dismissed the appeal of assessee. Aggrieved by the order of CIT(A), assessee is now before us and has raised the following grounds : 1. "That on the facts and circumstances of the case, the CIT(A) erred in sustaining disallowance of depreciation of Rs. 22,74,987 claimed @12.5% on 'Content Management Software' ('CM Software') under section 32 of the Income Tax Act, 1961 ('the Act) on the ground that (i) the said depreciation was claimed on 'webmaster software'; (ii) for which the appellant failed to satisfy the test of ownership for claiming depreciation. 1.1 That the CIT(A) erred on facts and in law in not appreciating that the depreciation was not claimed on webmaster software, but CMS software, satisfied the test in the hands of appellant. 1.2 Without prejudice that the CIT(A) erred on facts and in law in not appreciating if the appellant was not owner of the software, the expenditure incurred for development of software for providing services to DIT(Systems) was allowable as revenue expenditure under section 37(1) of the Act. 2. That the CIT(A) erred on facts and in law in not allowing expenditure incurred for development of software as revenue expenditure under section 37(1) of the Act holding that the said ITA No.2762/Del/2019 Taxman Publications Pvt. Ltd. vs. ACIT A.Y. 201516 3 plea did not emanate from the assessment order and was not a subject matter of the appeal. The appellant craves leave to add to, alter, delete, modify or vary the above grounds of appeal at or before the time of the hearing." 4. Before us, at the outset, Learned AR submitted that though assessee has raised various grounds but the 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 u/s 37(1) of the Act. 5. During the course of assessment proceedings, on the basis of the details furnished by the assessee, it was noticed that assessee had developed "Web Master Software" and on which the assessee had claimed depreciation. The assessee was asked to showcause as to why the depreciation claimed on such intangible assets not be disallowed as the software was not owned by it and the ownership of the softwa