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2017 (6) TMI 4 - AT - Income TaxDepreciation on printer - @ 60% or 15% - A.O rejected the claim of higher rate of depreciation @ 60% on the ground that the machine purchased by the assessee was not a normal printer but a heavy duty printer which can print Media mainly Flex, PVC Vinyle, one way vision etc. - Held that - Merely because the cost of the printer is very high as compared to that of a computer, therefore, higher rate of depreciation cannot be denied on that ground. We find merit in the above arguments of the ld. counsel for the assessee. It is an admitted fact that that the printer has been used by the assessee for the purposes of its business. It is also admitted fact that the printer cannot function without the command from the computer. Therefore, merely because the cost of the printer is abnormally high, the same, in our opinion, cannot be ground to deny higher rate of deprecation @ 60%. See CIT Vs. BSES Yamuna powers Ltd 2010 (8) TMI 58 - DELHI HIGH COURT held computer accessories and peripherals such as, printers, scanners and server etc. form an integral part of the computer system. In fact, the computer accessories and peripherals cannot be used without the computer. Consequently, as they are the part of the computer system, they are entitled to depreciation at the higher rate of 60% percent - Decided in favour of assessee.
Issues Involved:
1. Disallowance of depreciation on computer peripherals, specifically printers, claimed at 60% instead of 15%. Issue-wise Detailed Analysis: Issue 1: Disallowance of Depreciation on Printers at 60% Background: The assessee, involved in the business of import, export, and trading of computer printers and components, claimed depreciation at 60% on an Inkjet Printer costing ?50,61,465/-. The Assessing Officer (A.O) allowed depreciation at 15%, treating the printer as plant and machinery instead of a computer peripheral. A.O’s Observations: The A.O noted that the printer, described as a heavy-duty machine with significant volume, weight, and dimensions, was used for demonstrations and not for generating revenue. The A.O concluded that the printer did not qualify as a computer peripheral and allowed depreciation at 15%. CIT(A)’s Decision: The Commissioner of Income Tax (Appeals) upheld the A.O's decision, emphasizing the printer's size and cost, arguing it could not be considered a computer peripheral. The CIT(A) dismissed the assessee's reliance on the nomenclature of the machine as a printer. Assessee’s Argument: The assessee contended that the printer, integral to the computer system and used for business purposes, should be eligible for 60% depreciation. The assessee cited several judicial precedents, including the Hon'ble Delhi High Court's decisions in CIT Vs. BSES Yamuna Powers Ltd and CIT Vs. City Corp Maruti Finance Ltd, which allowed higher depreciation rates for computer peripherals. Tribunal’s Findings: Conclusion: The Tribunal allowed the appeal, granting the assessee the benefit of 60% depreciation on the printer, aligning with judicial precedents and recognizing the printer as a computer peripheral essential for the business. Similar Case (A.Y. 2011-12): The Tribunal applied the same reasoning to the appeal for A.Y. 2011-12, allowing the depreciation claim at 60% for the printer, consistent with the decision for A.Y. 2009-10. Final Order: The appeal for ITA No. 6197/DEL/2013 was partly allowed, and the appeal for ITA No. 6278/DEL/2015 was allowed, with the Tribunal pronouncing the order in the open court on 25.04.2017.
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