DCIT, V. M/s UAE Exchange & Financial Services,

ITA 91/BANG/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7045 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 08-10-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 17-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR K SHANKAR PRASAD JCITD R
• Assessee Lawyers: CHERIAN K BA
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI ABRAHAM P GEORGE , ACCOUNTANT MEMBER ITA NO. 91 / BANG/20 1 4 (ASSESSMENT YEAR: 20 09 - 10 ) DEPUTY COMMISSIONER OF INCOME - TAX, CIRCLE 12(5 ), BANGALORE. APPELLANT VS. M/S.UAE EXCHANGE & FINANCIAL SERVICES LTD. NG 12 & 13, GROUND FLOOR, NORTH BLOCK MANIPAL CENTRE, DICKENSON ROAD, BANGALORE. RESPONDENT PAN:AAACU2040F APPELLANT BY: DR. K.SHANKAR PRASAD, JCIT(D R) RESPONDENT BY: SHRI CHERIAN K BABY, CA. DATE OF HEARING : 08 - 10 - 2014 DATE OF PRONOUNCEMENT: 10 - 10 - 2014 O R D E R PER SMT. P.MADHAVI DEVI, JM : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A) - II, BANGALORE, DATED 7 - 10 - 2013 FOR THE ASSESSMENT YEAR 2009 - 10. THE REVENUE IS AGGRIEVED BY THE ORDER OF THE CIT(A) IN ALLOWING THE CLAIM OF DEPRECIATION ON PRINTER S AND SCANNER S AT THE RATE OF 60% AS APPLICABLE TO COMPUTERS. THE GRIEVANCE OF THE REVENUE IS THAT THE CIT(A) HA S FAILED TO ITA NO . 91/BANG/2014 M/S.UAE EXCHANGE & FINANCIAL SERVICES LTD. PAGE 2 OF 4 APPRECIATE THAT THE SCANNERS AND PRINTERS CAN BE OPERATED EVEN WITHOUT A COMPUTER AND HENCE CANNOT BECOME PART OF COMPUTER SYSTEM FOR BEING ELIGIBLE FOR DEPRECIATION AT THE RATE OF 60%. 2 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE - COMPA NY WHICH IS IN THE BUSINESS OF MONEY TRANSFER, MONEY CHANGING, TRAVEL AND TICKETING, INSURANCE SUPPORT SERVICES AND GOLD LOAN, FILED ITS RETURN F INCOME ON 30/9/2009 DECLARING TOTAL INCOME OF RS.21,46,17,550/ - . DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE INCOME - TAX ACT, 1961[HEREINAFTER REFERRED TO AS 'THE ACT'], THE ASSESSING OFFICER [AO] OBSERVED THAT THE ASSESSEE HAS CLAIMED DEPRECIATION AT THE RATE OF 60% ON PRINTERS, SCANNERS, PORT SWITCH ES , PROJECT ORS ETC. H E OBSERVED THAT THESE ARE OFFICE E QUIPMENT ELIGIBLE FOR DEPRECIATION AT THE RATE OF 15% ONLY. THEREFORE, A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE . THE ASSESSEE, VIDE SUBMISSIONS DATED 21/1/2013 CLAIMED THAT THESE ITEMS ARE PARTS OF PCS AND CANNOT INDEPENDENTLY WORK IN ISOLATION AND HENCE THE CLAIM IS ALLOWABLE. THE AO, HOWEVER, WAS NOT SATISFIED WITH THE ASSESSEE S CONTENTION AND HELD THAT THE PRINTERS AND SCANNERS DO NOT SUFFER THE SAME RATE OF OBSOLESCE AS COMPUTER AND FURTHER THEY CANNOT BE CLASSIFIED AS COMPUTERS. HE, THEREFOR E, RESTRICTED THE DEPRECIATION AT 15% AS APPLICABLE TO OFFICE EQUIPMENT. ITA NO . 91/BANG/2014 M/S.UAE EXCHANGE & FINANCIAL SERVICES LTD. PAGE 3 OF 4 3. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WHO ALLOWED THE SAME AGAINST WHICH THE REVENUE IS IN APPEAL BEFORE US. 4. HAVING REGARD TO THE CONTENTIONS OF BOT H THE PARTIES AND THE MATERIAL ON RECORD, WE FIND THAT THE CIT(A) HAS FOLLOWED THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. DATACRAFT INDIA LTD. (40 SOT 295)(MUM)(SB) WHEREIN IT IS HELD THAT ROUTER S AND SWITCHES ARE TO BE CLAS SIFIED AS COMPUTER PERIPHERALS AND DEPRECIATION AT THE RATE OF 60% BE ALLOWED. THE CIT(A) HAS ALSO CONSIDERED THE DECISION OF THE HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS. M/S.BONANZA WHEREIN IT WAS HELD THAT DEPRECIATION AT THE RATE OF 60% IS ALLO WABLE ON COMPUTER PERIPHERALS. WE FIND THAT THE PRINTERS, SCANNERS, PROJECTORS AS WELL AS PORT - SWITCHES ARE ALL FUNCTIONALLY DEPENDENT ON COMPUTERS AND THEREFORE, THE ORDER OF THE CIT(A) IS IN CONSONANCE WITH THE PRECEDENTS ON THE ISSUE AND THE LEARNED DE PARTMENTAL REPRESENTATIVE HAS NOT BEEN ABLE TO PLACE ANY OTHER DECISION TO THE CONTRARY BEFORE US. IN VIEW OF THE SAME, WE SEE NO REASON TO INTERFERE WITH THE ORDER OF THE CIT(A) AND THE REVENUE S APPEAL IS ACCORDINGLY DISMISSED. PRON OUNCED IN THE OP EN COURT ON 10 TH OF OCTOBER , 201 4. SD/ - SD/ - ( ABRAHAM P GEORGE ) ( SMT. P.MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER EKSRINIVASULU ITA NO . 91/BANG/2014 M/S.UAE EXCHANGE & FINANCIAL SERVICES LTD. PAGE 4 OF 4 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4 . CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE TRIBUNAL BANGALORE