Facts of the Case

  1. The Revenue preferred appeals before the Delhi High Court against the orders passed in favour of the assessee.
  2. The controversy involved the tax treatment and depreciation-related issues concerning software media.
  3. During the course of hearing, counsel appearing for both the Revenue and the assessee submitted that the issue was no longer res integra.
  4. It was brought to the notice of the Court that the Supreme Court had already settled the controversy in Commissioner of Income Tax vs Oracle Software India Ltd., (2010) 228 CTR 433.
  5. In view of the binding precedent of the Supreme Court, the High Court considered it unnecessary to examine the issue afresh.

Issues Involved

  1. Whether the controversy raised by the Revenue stood concluded by the judgment of the Supreme Court in Commissioner of Income Tax vs Oracle Software India Ltd.?
  2. Whether any further adjudication was required by the Delhi High Court once the issue had already been settled by the Supreme Court?

Petitioner’s (Revenue’s) Arguments

  1. The Revenue pursued the appeals challenging the relief granted to the assessee.
  2. During the hearing, the Revenue's counsel acknowledged that the controversy involved in the appeals was covered by the judgment of the Supreme Court in Commissioner of Income Tax vs Oracle Software India Ltd., (2010) 228 CTR 433.

Respondent’s (Assessee’s) Arguments

  1. The assessee contended that the issue stood fully covered by the authoritative judgment of the Supreme Court.
  2. The assessee submitted that in light of the binding precedent, the appeals deserved to be disposed of accordingly.

Court Findings

  1. The Delhi High Court heard the submissions of both parties.
  2. The Court recorded that the controversy involved in the appeals was covered by the decision of the Supreme Court in Commissioner of Income Tax vs Oracle Software India Ltd., (2010) 228 CTR 433.
  3. Since the legal issue had already been settled by the Apex Court, no separate examination was required.
  4. The High Court followed the binding precedent and disposed of the appeals.

Court Order

The Delhi High Court disposed of ITA Nos. 668/2010 and 669/2010 by holding that the controversy stood covered by the decision of the Supreme Court in Commissioner of Income Tax vs Oracle Software India Ltd., (2010) 228 CTR 433. Accordingly, the appeals were disposed of in terms of the law laid down by the Supreme Court.

Important Clarification

  • The Delhi High Court did not independently adjudicate the merits of the controversy.
  • The Court relied entirely on the binding judgment of the Supreme Court.
  • The order reinforces the principle that High Courts are bound by judgments of the Supreme Court on identical questions of law.
  • The decision highlights the precedential value of Supreme Court rulings in tax matters involving depreciation and software-related assets.

Relevant Sections Involved

  • Section 32 of the Income-tax Act, 1961 – Depreciation
  • Provisions relating to depreciation on plant and machinery/computer software and related assets

Link to download the order -

https://delhihighcourt.nic.in/app/case_number_pdf/2010:DHC:11471/MBL04062010ITA6682010_163227.pdf

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