The Delhi High Court upheld the Income Tax Appellate Tribunal (ITAT) order which deleted the disallowance of expense under Income Tax Act made by the Assessing Officer (AO). The Depreciation on Software is calculated at a rate of  25% Instead of 60%. The appellant/revenue seeks to assail the order dated 30.03.2021 passed by the Income Tax Appellate Tribunal [“Tribunal”].  The appellant revenue challenged the deletion of the disallowance of Rs 20,84,878/- u/s 14A r/w Rule 8D of the Income Tax Act 1961 which was in favour of  Times Internet Limited, the respondent assessee. And questioned whether on facts and circumstances of the case and in law, ITAT has erred in deleting disallowances of expenses of Rs. 1,89,45,379/- u/s 37(1) of the Act. The revenue also challenged the deletion of disallowance made on account of depreciation for Rs 32,12,253/- on software licences @ 25% by relying on the earlier order and without assigning any specific reasons.  Mr Puneet Rai, senior standing counsel, appeared on behalf of the appellant/revenue that the proposed question covered by the decision of the coordinate bench rendered in Cargo Motors (P.) Ltd. v. Deputy Commissioner of Income-tax. The coordinate bench has ruled that the disallowance calculated under Rule 8D of 1962 Rules should factor in only investments made by an assessee to earn exempt income. Therefore, the said proposed question of law need not be considered by us. The Commissioner of Income Tax (Appeals) [“CIT(A)”] had deleted the disallowance amounting to Rs.1,89,45,379/-. The coordinate bench confirmed the view taken by the Tribunal, which has been adopted by the CIT(A) in the instant appeal. The  Court viewed that deletion of disallowance amounting to Rs.1,89,45,379/- was rightly ordered by the Tribunal. The said expenditure was claimable by the respondent/assessee under Section 37(1) of the 1961 Act. The Assessing Officer (AO) took the view that depreciation on software should be calculated at the rate of 25% instead of 60%. The CIT(A), following the decision taken by his predecessor for AY 2009-10, which was in favour of the respondent/assessee, deleted the disallowance. The deletion of disallowance made by the CIT(A) was confirmed by the Tribunal. While closing the appeal, the division bench of Justice Rajiv Shakdher and Justice Girish Kathpalia upheld the order of ITAT.