2018 (9) TMI 2116 - AT - Income Tax

Depreciation claimed on robotix kits - assessee claimed depreciation @ 60% which is applicable for computers - HELD THAT - It is common knowledge that nowadays the entire industry is automated and machineries are operated through computer. It does not mean that the entire industrial undertaking was a computer. The computer or software installed therein may be used for operating industrial machineries. In this case also the computer or software attached is used for operation of robotix kits. It cannot be construed as if the robotix kits itself is a computer. This Tribunal is of the considered opinion that the computer is totally different which comprises processing data and not the machinery which undertakes works as per the instruction given through the computer. Therefore computer is a different one and robotix kits are entirely different machineries. Hence this Tribunal is of the considered opinion that the assessee is not eligible for depreciation @ 60% as claimed. Decided against assessee. Depreciation for three block of assets - AO found that the assessee has not submitted proper bills towards purchase of assets - HELD THAT - This Tribunal is of the considered opinion that giving one more opportunity to the assessee to produce bills would not prejudice the interests of the Revenue. Even though no ground was raised before the CIT(Appeals) in respect of the addition the assessee has raised specific ground before this Tribunal. This Tribunal being the final fact finding authority the facts need to be settled at Tribunal level. Therefore examining the matter by the AO on the basis of bills and vouchers that may be produced by the assessee is very essential. Ground allowed for statistical purposes.

Summary

Issues:
1. Depreciation claimed on robotix kits
2. Addition of Rs. 14,48,466

Depreciation claimed on robotix kits:
The appeal was against the order of the Commissioner of Income Tax (Appeals) regarding the assessment year 2014-15. The main issue was the depreciation claimed by the assessee on robotix kits. The assessee argued that since the robotix kits can only be operated with a computer, they should be considered under the head "computer" and be eligible for depreciation at 60%. However, the Tribunal noted that just because the kits are operated through a computer does not make them computers themselves. The Tribunal distinguished between computers, which process data, and machinery like robotix kits, which perform tasks based on computer instructions. Therefore, the Tribunal held that the assessee was not eligible for depreciation at 60% as claimed.

Addition of Rs. 14,48,466:
The second issue was the addition of Rs. 14,48,466. The assessee claimed depreciation for three blocks of assets at different rates. The Assessing Officer disallowed Rs. 14,48,466 for the third block as proper bills were not submitted. The assessee argued that bills were available and requested a reconsideration. The Departmental Representative contended that since the addition was not challenged before the CIT(Appeals), the matter should not be raised before the Tribunal. The Tribunal decided to give the assessee another opportunity to produce bills, stating that settling facts at the Tribunal level was essential. The issue was remitted back to the Assessing Officer for re-examination based on the bills and vouchers that may be provided by the assessee. The appeal was partly allowed for statistical purposes.

In conclusion, the Tribunal upheld that robotix kits were not eligible for depreciation at 60% and remitted the issue of the addition of Rs. 14,48,466 back to the Assessing Officer for further examination based on the availability of bills and vouchers.