ACIT, Circle-2(2), Hyd, Hyderabad V. Hitech Print Systems Ltd., Hyd, Hyderabad

ITA 1182/HYD/2015

• Counselvise Citation: 118222514 RSA 2015
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 29-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B KURMI NAIDU
• Keywords: Depreciation
• Section: 143(3); 115JB; 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA.NO.1182/HYD/2015 ASSESSMENT YEAR 2011-2012 THE ACIT, CIRCLE - 2(2), HYDERABAD. VS. M/S. HITECH PRINT SYSTEMS LTD., HYDERABAD. PAN AAACH2674N (APPELLANT) (RESPONDENT) FOR REVENUE : MR. B. KURMI NAIDU FOR ASSESSEE : MR. K.C. DEVDAS DATE OF HEARING : 10.11.2015 DATE OF PRONOUNCEMENT : .2015 ORDER PER SMT. P. MADHAVI DEVI, J.M. THIS IS REVENUES APPEAL FOR THE A.Y. 2011- 2012 AGAINST THE ORDER OF THE LD. CIT(A)-II, HYDERA BAD DATED 30.07.2015. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY WHICH IS ENGAGED IN THE BUSINESS OF BULK PRINTING, FILED ITS RETURN OF INCOME FOR THE RELEVA NT A.Y. ON 26.09.2011 ADMITTING TOTAL INCOME OF RS.NIL UNDER T HE NORMAL PROVISIONS OF I.T. ACT AND RS.22,52,457 UNDE R SECTION 115JB OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) OF THE I.T. ACT, T HE A.O. OBSERVED THAT THE ASSESSEE HAS CLAIMED DEPRECIATION @ 2 ITA.NO.1182/HYD/2015 M/S. HITECH PRINT SYSTEMS LTD., HYDERABAD. 60% ON PRINTING EQUIPMENT. THE A.O. THEREFORE, ASKE D THE ASSESSEE COMPANY TO EXPLAIN AS TO WHY THE DEPRECIAT ION SHOULD NOT BE RESTRICTED TO 15%. THE ASSESSEE STATE D THAT THE PRINTER AND SCANNERS ARE INTEGRAL PARTS OF COMP UTERS AND THEREFORE, THE SAME RATE OF DEPRECIATION IS ALL OWABLE. THE A.O. HOWEVER, HELD THAT AS PER THE PROVISIONS O F SECTION 32 OF THE I.T. ACT, COMPUTERS DO NOT INCLUD E PRINTERS AND SCANNERS AND THEREFORE, THEY ARE NOT E LIGIBLE FOR HIGHER RATE OF DEPRECIATION. HE ACCORDINGLY, RE STRICTED THE DEPRECIATION ON PRINTERS AND SCANNERS AT 15%. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO ALLOWED THE SAME BY FOLLOWING THE DECISI ON OF ITAT IN ASSESSEES OWN CASE FOR THE EARLIER A.Y. 20 03-04 IN ITA.NO.478/HYD/2009 DATED 30.09.2009. AGAINST THE RELIEF GIVEN BY THE LD. CIT(A), THE REVENUE IS IN A PPEAL BEFORE US. 3. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THAT THE VERY SAME ISSU E HAD ARISEN IN ASSESSEES OWN CASE FOR THE EARLIER A.Y. I.E., A.Y. 2003-04 AND THIS TRIBUNAL HAD HELD THAT THE PRINTER S AND SCANNERS ARE THE INTEGRAL PARTS OF COMPUTER AND ARE ELIGIBLE FOR DEPRECIATION @ 60%. THE RELEVANT PORTI ON OF THE ITAT ORDER IS REPRODUCED AT PARA-5 OF THE CIT(A) OR DER WHICH IS REPRODUCED HEREUNDER FOR THE SAKE OF READY REFERENCE. I) WE HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE RIVAL PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND MERIT THAT THE ISSUE 3 ITA.NO.1182/HYD/2015 M/S. HITECH PRINT SYSTEMS LTD., HYDERABAD. INVOLVED IN THIS APPEAL IS DIRECTLY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE KOLKATA BENCH OF THE TRIBUNAL IN THE CASE OF ITO V. 5 MAJUMDAR (SUPRA) IN WHICH ONE OF US WAS A PARTY ( THE JUDICIAL MEMBER) WHEREIN IT HAS BEEN HELD VIDE HEAD-NOTE AT PAGE 75 OF THE REPORTS ( 280 1 TR (AT) AS UNDER- II) HELD, DISMISSING THE APPEAL, THAT THOUGH THE TERM 'COMPUTER' HAS NOT BEEN DEFINED UNDER THE ACT, YET EXPLANATION (A) TO CLAUSE (XI) OF SEC.36(1) OF THE INCOME TAX ACT, 1961, DEFINED THE TERM 'COMPUTER SYSTEM'. FURTHER, THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA IN ITS STUDY MATERIAL DEFINED THE TERM 'COMPUTER' AS AN ELECTRONIC DATA PROCESSING DEVICE CAPABLE OF RECEIVING INPUT, STORING SETS OF INSTRUCTIONS FOR .SOLVING PROBLEMS AND GENERATING OUTPUT WITH HIGH SPEED AND ACCURACY. A FAIR READING OF THE REPORT OF THE INSPECTOR SHOWED THAT THE PRINTER AND SCANNER COULD NOT BE USED WITHOUT THE COMPUTER, THAT IS, THEY WERE PART OF THE COMPUTER SYSTEM. THUS, THE PRINTER AND SCANNER WERE AN INTEGRAL PART OF THE COMPUTER SYSTEM AND THEY WERE TO BE TREATED AS COMPUTER FOR THE PURPOSE OF ALLOWING HIGHER RATE OF DEPRECIATION.' III) RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE TRIBUNAL AND IN THE ABSENCE OF ANY OTHER CONTRARY MATERIAL BROUGHT ON RECORD BY THE REVENUE, WE ARE INCLINED TO UPHOLD THE ORDER PASSED BY THE CIT (A) IN ALLOWING -DEPRECIATION ON DATA PROCESSING EQUIPMENT AT 60% AND ACCORDINGLY THE GROUNDS TAKEN BY THE REVENUE ARE REJECTED. ' IV) IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. 3.1. SINCE THE LD. CIT(A) HAS FOLLOWED THE DECISIO N OF THE COORDINATE BENCH OF THIS TRIBUNAL IN ASSESSE ES 4 ITA.NO.1182/HYD/2015 M/S. HITECH PRINT SYSTEMS LTD., HYDERABAD. OWN CASE, WE DO NOT SEE ANY REASON TO INTERFERE WIT H THE SAME. 4. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 04.12.2015. SD/- SD/- (S. RIFAUR RAHMAN) (SMT. P. MADHAVI DEVI) ACOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 04 TH DECEMBER, 2015 VBP/- COPY TO : 1. THE ACIT, CIRCLE - 2(2), ROOM NO.824, 8 TH FLOOR, B BLOCK, I.T. TOWERS, A.C. GUARDS, HYDERABAD. 2. M/S. HITECH PRINT SYSTEMS LTD., ANJANI CEMENT CENTRE, P.NO. 7 & 8, NAGARJUNA HILLS, PUNJAGUTTA, HYDERABAD 082. 3. CIT(A) - I I , HYDERABAD 4 . PR. CIT - I I , HYDERABAD 5 . D.R. ITAT B BENCH, HYDERABAD. 6 . GUARD FILE