DCIT, New Delhi V. M/s. Birla Soft Ltd., New Delhi

ITA 631/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4120 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 08-03-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 10-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY VOHRA ADV NERAJ JAIN; PI NKI KAPOOR
• Assessee Lawyers: PI NKI KAPOOR ADV ASS; AJAY VOHRA ADV NERAJ JAIN
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH : A NEW DELHI) (DELHI BENCH : A NEW DELHI) (DELHI BENCH : A NEW DELHI) (DELHI BENCH : A NEW DELHI) BEFORE SHRI G.E. VEERABHADRAPPA, HONBLE VICE PRSID ENT AND BEFORE SHRI G.E. VEERABHADRAPPA, HONBLE VICE PRSID ENT AND BEFORE SHRI G.E. VEERABHADRAPPA, HONBLE VICE PRSID ENT AND BEFORE SHRI G.E. VEERABHADRAPPA, HONBLE VICE PRSID ENT AND SHRI A.D. JAIN , JUDICIAL MEMBER SHRI A.D. JAIN , JUDICIAL MEMBER SHRI A.D. JAIN , JUDICIAL MEMBER SHRI A.D. JAIN , JUDICIAL MEMBER I.T.A. NO.631/DEL./2010 I.T.A. NO.631/DEL./2010 I.T.A. NO.631/DEL./2010 I.T.A. NO.631/DEL./2010 (ASSESSMENT YEAR : 2004 (ASSESSMENT YEAR : 2004 (ASSESSMENT YEAR : 2004 (ASSESSMENT YEAR : 2004- -- -05) 05) 05) 05) DCIT, CIRCLE 3(1), DCIT, CIRCLE 3(1), DCIT, CIRCLE 3(1), DCIT, CIRCLE 3(1), VS. VS. VS. VS. M/S BIRLA SOFT LT M/S BIRLA SOFT LT M/S BIRLA SOFT LT M/S BIRLA SOFT LTD., D.,D., D., NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. 10 1010 10 TH THTH TH FLOOR, PRAKASH DEEP BUILDING, FLOOR, PRAKASH DEEP BUILDING, FLOOR, PRAKASH DEEP BUILDING, FLOOR, PRAKASH DEEP BUILDING, 7 77 7 TH THTH TH FLOOR, TOLSTOY MARG, FLOOR, TOLSTOY MARG, FLOOR, TOLSTOY MARG, FLOOR, TOLSTOY MARG, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (PAN/GIR NO. : AAACB2769E) (PAN/GIR NO. : AAACB2769E) (PAN/GIR NO. : AAACB2769E) (PAN/GIR NO. : AAACB2769E) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSESSEE BY : AJAY VOHRA, ADV., NERAJ JAIN & MS. PI NKI KAPOOR, ADV. ASSESSEE BY : AJAY VOHRA, ADV., NERAJ JAIN & MS. PI NKI KAPOOR, ADV. ASSESSEE BY : AJAY VOHRA, ADV., NERAJ JAIN & MS. PI NKI KAPOOR, ADV. ASSESSEE BY : AJAY VOHRA, ADV., NERAJ JAIN & MS. PI NKI KAPOOR, ADV. REVENUE BY : SHRI ASHOK REVENUE BY : SHRI ASHOK REVENUE BY : SHRI ASHOK REVENUE BY : SHRI ASHOK PANDEY, CIT(DR) PANDEY, CIT(DR) PANDEY, CIT(DR) PANDEY, CIT(DR) ORDER ORDER ORDER ORDER PER A.D. JAIN, JM THIS IS DEPARTMENTS APPEAL FOR ASSESSMENT YEAR 2004-05 CONTENDING THAT THE CIT(A) ERRED IN ALLOWING DEPREC IATION @ 60% ON COMPUTER ACCESSORIES AND PERIPHERALS AMOUNTING TO `99,4 8,099 AGAINST @ 25% ALLOWED BY THE AO, SINCE THE I.T. RULES ALLOW 60% DEPRECIATION ONLY ON COMPUTER AND COMPUTER SOFTWARE. 2. THE ASSESSEE CLAIMED DEPRECATION AT 60% ON COMPUTER ACCESSORIES AND PERIPHERALS, NAMELY, CD WRITERS, PRINTER S, NETWORK CABLES, SWITCHES, RACKS, ISOLATORS, DIVIDERS, ETC. THE AO , WHILE DISALLOWING THE CLAIM AND RESTRICTING IT TO 25%, OBSER VED THAT ONLY COMPUTER AND COMPUTER SOFTWARE ARE ELIGIBLE @ 60% AN D THE SAME CANNOT BE EXTENDED TO COMPUTER ACCESSORIES AND PERIPHE RALS. 3. THE CIT(A), BY VIRTUE OF THE IMPUGNED ORDER, ALL OWED THE CLAIM OF 60% DEPRECIATION, FOLLOWING THE TRIBUNALS ORDER IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2003-04. I.T.A. NO.631/DEL./2010 (A.Y. : 2004-05) 2 4. CHALLENGING THE IMPUGNED ORDER, THE LD.DR HAS ARG UED THAT THE I.T. RULES ALLOW 60% DEPRECIATION ONLY ON COMPUTER A ND COMPUTER SOFTWARE AND THAT, THEREFORE, THE CIT(A) WENT WRONG IN ALLOWING TO THE ASSESSEE DEPRECIATION @ 60% ON COMPUTER ACCESSORIES AND PERIPHERALS; THAT DEPRECIATION @ 25% WAS RIGHTLY ALLO WED BY THE AO. 5. THE LD.COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, H AS CONTENDED THAT ALL EQUIPMENTS/PARTS WHICH RUN WITH TH E HELP OF COMPUTER SYSTEM HAVE TO BE TREATED AS COMPUTER ELIGIBL E FOR DEPRECIATION AT THE HIGHER RATE OF 60%. RELIANCE H AS BEEN PLACED ON CIT VS. BSES RAJDHANI POWERS LTD.(SUPRA), A DECISION RENDERED BY THE HONBLE DELHI HIGH COURT (JURISDICTIONAL HIGH COURT) IN I.T.A. NO.1266 OF 2010 VIDE JUDGMENT DATED 31.8.2010 (COPY PLACED ON RECORD). 6. HAVING HEARD THE PARTIES AND HAVING PERUSED THE MA TERIAL ON RECORD, WE FIND THE MATTER TO BE COVERED IN FAVOUR OF THE ASSESSEE BY BSES RAJDHANI POWER LTD.(SUPRA), WHEREIN AGREEING WITH THE VIEW TAKEN BY THE TRIBUNAL, IT WAS HELD THAT COMPUTER ACC ESSORIES AND PERIPHERALS SUCH AS PRINTERS, SCANNERS, SERVERS, ETC. FORM AN INTEGRAL PART OF THE COMPUTER SYSTEM; THAT THE COMPUTER ACCESSOR IES AND PERIPHERALS CANNOT BE USED WITHOUT THE COMPUTER; AND THAT AS SUCH, THEY BEING PART OF THE COMPUTER SYSTEM, ARE ENTITLED TO DEPRECATION AT THE HIGHER RATE OF 60%. 7. IN THE PRESENT CASE, THE ASSESSEE HAS CLAIMED HIGHER DEPRECIATION @ 60% ON COMPUTER ACCESSORIES AND PERIPHE RALS LIKE CD WRITERS, PRINTER, NETWORK CABLES, SWITCHES, RACKS, ISOLAT ORS, DIVIDERS, ETC. IT HAS NOT BEEN SHOWN THAT THIS EQUIPMENT CAN BE USED I NDEPENDENTLY OF A COMPUTER. THEY, AS SUCH, FORM AN INTEGRAL PART OF THE COMPUTER SYSTEM. ACCORDINGLY, IN KEEPING WITH BSES RAJADHANI POWER LTD.(SUPRA), THEY ARE ENTITLED TO HIGHER DEPRECIATI ON @ 60%. ACCORDINGLY, FINDING NO MERIT IN THE GRIEVANCE SOUGH T TO BE RAISED BY THE DEPARTMENT, THE SAME IS REJECTED. I.T.A. NO.631/DEL./2010 (A.Y. : 2004-05) 3 8. IN THE RESULT, THE APPEAL FILED BY THE DEPARTMENT IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 29.04.2011. SD/- SD/- (G.E. VEERABHADRAPPA) (A.D. JAIN) VICE PRESIDENT JUDICIAL MEMBER DATED, APRIL 29, 2011 SKB COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XX, NEW DELHI 5.CIT(ITAT), NEW DELHI. AR/ITAT