2021 (8) TMI 1371 - AT - Income Tax

Depreciation at the rate of 60% on computer based equipment, which was restricted to 15% by the AO - HELD THAT - CIT(A) has allowed the claim of assessee in full after following the order of First Appellate Authority for AY 2011-12. It is further observed that the AO has himself allowed assessee s claim of depreciation @ 60% on computer based equipment in AY 2014-15 From perusal of the impugned order it is gathered that the issue is perennial. In AY 2005-06, 2007-08 and AYs 2009-10 to 2011-12 the CIT(A) had allowed assessee s similar claim of depreciation on computer based equipments. In appeal by the Revenue, the Tribunal confirmed the order of First Appellate Authority. No infirmity in the impugned order, the same is upheld and the appeal of Revenue is dismissed, sans merit.

Summary

Issues:
Claim for depreciation at the rate of 60% on Plant & Machinery.

Analysis:
The appeal by the Revenue was directed against the order of Commissioner of Income Tax (Appeals)-52, Mumbai for the Assessment Year (AY) 2012-13. The solitary issue raised was regarding the assessee's claim for depreciation at the rate of 60% on Plant & Machinery, specifically computer-based items. The Assessing Officer (AO) had initially restricted the depreciation claim to 15%. However, the CIT(A) allowed the assessee's claim in full by referring to the order of his predecessor in the previous assessment year. It was noted that the AO had allowed the depreciation claim at the rate of 60% on computer-based items in the subsequent assessment year as well.

During the proceedings, the Department representative acknowledged that the claim of depreciation at 60% was allowed in the preceding and succeeding assessment years by the CIT(A) and the AO, respectively. The CIT(A) had followed the decision of the First Appellate Authority for the AY 2011-12 in allowing the claim in full. The Tribunal observed that the issue of depreciation on computer-based equipment had been consistently allowed in previous assessment years as well.

After examining the submissions and orders of the authorities, the Tribunal found no fault in the CIT(A)'s decision to allow the assessee's claim for depreciation at the rate of 60% on computer-based equipment. Given the history of similar claims being allowed in previous years and the consistency in decisions, the Tribunal upheld the CIT(A)'s order and dismissed the Revenue's appeal, deeming it meritless. The order was pronounced in the open court on August 30, 2021.