2014 (12) TMI 1376 - HC - Income Tax

Depreciation on computers and peripherals - @60% OR 15% - finding recorded by the Tribunal is that the laptops, printer, scanner, mouse, IBM san switches, projector, pen drive, network equipment, router pack, desktop with monitor, visual impex etc., are all computer peripherals and are accordingly covered under the head 'Computer and Peripherals', which are entitled to depreciation @ 60% - HELD THAT - The aforesaid finding is essentially a finding of fact. We also find that the issue is covered by the decision of this Court in several cases starting from CIT versus BSES Rajdhani Power Limited 2010 (8) TMI 58 - DELHI HIGH COURT , CIT versus Citicorp Maruti Finance LImited 2010 (11) TMI 802 - DELHI HIGH COURT and CIT versus Bonanza Portfolio Limited 2011 (8) TMI 1058 - DELHI HIGH COURT . Assessee, who is present on advance notice, has drawn our attention to another decision in CIT versus Birlasoft Limited 2011 (12) TMI 608 - DELHI HIGH COURT Special Leave to Appeal filed against the said decision was dismissed by order dated 14th February, 2014.

Summary

Issues:
1. Depreciation rate on computers and peripherals.
2. Delay in re-filing the appeal.

Analysis:

Issue 1: Depreciation rate on computers and peripherals
The judgment pertains to an appeal by the Revenue challenging the finding of the Income Tax Appellate Tribunal (Tribunal) granting depreciation at 60% on computers and peripherals instead of the standard 15% applicable to plant and machinery for the Assessment Year 2007-08. The Tribunal categorized laptops, printers, scanners, mice, IBM san switches, projectors, pen drives, network equipment, router packs, desktops with monitors, and visual impex as computer peripherals entitled to depreciation at 60%. The High Court noted that this finding is a factual determination. It referenced previous decisions such as CIT versus BSES Rajdhani Power Limited, CIT versus Citicorp Maruti Finance Limited, CIT versus Bonanza Portfolio Limited, and CIT versus Birlasoft Limited to support the classification of these items as computer peripherals eligible for higher depreciation rates. The Court dismissed the appeal on merits, upholding the Tribunal's decision.

Issue 2: Delay in re-filing the appeal
The High Court observed a delay of 395 days in re-filing the appeal. Despite the delay, the Court decided not to issue notice on the application as it found that the appeal on merits did not require consideration. Consequently, the application and the appeal were treated as dismissed due to the lack of necessity for further examination.