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TMI Blog2010 (2) TMI 912X X X X Extracts X X X X X X X X Extracts X X X X ..... er found that assessee had debited a sum of Rs.8,77,915 towards expenses incurred on exhibition, seminars and conferences held in Hannover, Dubai. He found that total expenses on this exhibition/conference was incurred at Rs.17,55,831. 50 per cent of the above expenses was borne by the assessee and the 50 per cent was by the other group concern. Assessing Officer asked the assessee why expenses incurred on the seminar and conference held at Dubai be not disallowed. It was contended by the assessee that expenditure incurred at Hannover/Dubai for holding exhibition, seminar and conferences were borne by the assessee and Havells India Ltd. equally. The conferences were held jointly by the assessee and Havells India Ltd. The "CRABTREE" brand is an international brand and was purchased by Havells Industries Ltd. from Crabtree Ltd., UK. The participation in the conferences were for the purpose to advertise and explore market. Assessing Officer has disallowed 50 per cent of the expenses borne by the assessee, i.e., 50 per cent of Rs.8,77,915 which comes to Rs.4,38,957 on the ground that seminars, exhibitions were held in the foreign countries, namely, Hannover/Dubai etc. The assessee-comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king the disallowance. Assessing Officer has not doubted the genuineness of expenses and the business expediency for incurring such expenses. The turnover of the assessee had increased many folds because of these conferences and advertisements from assessment years 2002-03 to 2005-06. The disallowance can be made if it was found that expenses were not wholly and exclusively for the purpose of business. But no such circumstances have been pointed out by the Assessing Officer. Therefore, we allow the appeal of the assessee and delete the disallowance. 7. In assessment year 2004-05, the solitary grievance of the assessee is that Learned CIT (Appeals) has erred in allowing depreciation at the rate of 25 per cent on video conferencing equipment as against 60 per cent claimed by the assessee on the ground that video conferencing equipments are not computers. The brief facts of the case are that during the course of assessment proceedings, Assessing Officer found that assessee has made addition to the EDP installation to the extent of Rs.59,26,975. It claimed depreciation at the rate of 60 per cent. On perusal of the details of addition made by the assessee, it was found by the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... smission line allow for the use of POTS, or the plain telephone system, in some low speed applications, such as videotelephony, because they convert the digital pulses to/from analog waves in the audio spectrum range. A video conference system is a computer device, that accepts information (in the form of digitalalized data) by way of Video input (webcam or video camera) and audio input (microphones) and process the data and transfer through analog or digital telephone network or LAN and gives the output data by way of Video output (monitor, television or projector) and audio output (loudspeakers associated with display device or telephone). A computer is a programmable machine. The two principal characteristics of a computer are: 1. It respond to a specific set of instructions in a well defined manner. 2. It can execute a prerecorded list of instructions Modem computers are electronic and digital. The actual machinery (Hardware) includes webcam, speakers in addition to input device, output device and central processing unit. Every computer is also requires a bus that transmits data from one part of the computer to another. The video ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... head 'Computers' at the rate of 60 per cent. Definition of Computer as per section 2(1)(t) of the Information Technology Act, 2000. Definition - A 'computer' is defined as under:- The expression "computer" has not been defined in the Act. However, it has been defined by section 2(1)(t) of the Information Technology Act, 2000. As per the said Act, "computer" means any electronic, magnet, optical or other high speed data processing device or system which performs logical, arithmetic and memory functions by manipulation of electronics or magnetic or optical impulses and includes all input-output processing, storage, computer software or communication facilities which are connected or related to the computer in a computer system or computer network". 10. On the strength of above explanation, he submitted that video conferencing machine is to be equated with computers and depreciation at the rate of 60 per cent be allowed to the assessee. Learned DR on the other hand submitted that speaker, TV, camera etc. attached with a computer if carrying out video conferencing cannot be construed as integral part of the computer enabling the assessee to claim depreci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of CIT v. Karnataka Power Corpn. [2001] 247 ITR 268 wherein the issue before the Hon'ble Supreme Court was whether a building can be treated as a "plant". Hon'ble Supreme Court has held that if the building has been planed and constructed in a way which serves an assessee's special technical requirement then such building will equated to be treated as "plant". On the basis of this decision, the ITAT has considered printer and scanner as integral part of the computer and allowed depreciation at the rate of 60 per cent. Taking into consideration this decision of the ITAT and the material placed before us by the assessee, we deem it appropriate to set aside this issue to the file of the Assessing Officer for readjudication, Assessing Officer shall consider each item in detail and find out which can be equated and construed as computer for the purpose of granting depreciation at the rate of 60 per cent. Assessing Officer shall provide due opportunity of hearing to the assessee and decide the issue in accordance with law. The appeal of the assessee is allowed for statistical purposes. 12. In the net result, the appeal filed by the assessee for the assessment year 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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