TMI Blog2011 (4) TMI 786X X X X Extracts X X X X X X X X Extracts X X X X ..... ation - The assessing officer to allow 60 per cent depreciation on the computers as claimed by the assessee - By now, it is a settled position of law that depreciation is allowable on computers including peripheral such as printers etc. at the rate of 60 per cent and hence, do not find any reason to interfere in the order of the ld. CIT (A) on this issue - Held that computers and their peripherals will be eligible for depreciation at the rate of 60 per cent. - ITA No. 1856 (Del) of 2010 - - - Dated:- 8-4-2011 - A.D. Jain, K.D. Ranjan, JJ. Neeraj K. Jain, Adv. and Pinky Kapoor, Adv., for the Appellant Gajanand Meena (CIT)-DR, for the Respondent ORDER K.D. Ranjan: This appeal by the Revenue for assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of capital expenditure. 4. On appeal the ld. CIT (Appeals) observed that in assessment year 2004-05 the issue of allowability of recruitment and training expenses as revenue expenditure was examined by his predecessor in detail. He had allowed the expenditure incurred on training as revenue expenditure. The ld. CIT (A) following the decision for AY 2004-05 deleted the addition on account of recruitment and training expenses. 5. Before us the ld. AR of the assessee submitted that the assessing officer had disallowed 2/3rd of recruitment and training expenses of Rs.1,03,65,985/-. The ld. AR of the assessee further submitted that similar disallowance was made in AY 2004-05, which was deleted by the ld. CIT (A). The Department had accep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure incurred by the taxpayer is of revenue nature, the same is entirely deductible even if there accrues an advantage of enduring nature in favour of the taxpayer as a result of the said expenditure. This is because going by the very nature of the expenditure being revenue, it operates in the revenue field leaving the capital field untouched. The enduring benefit resulting from the said expenditure may justify the action of the taxpayer to write off the said expenditure in his books of account over a period of more than one year. However, such accounting treatment by itself is not conclusive to decide the nature of the relevant expenditure, whether capital or revenue. In the case of Amar Raja Batteries Ltd. v. Dy. CIT [2004] 91 I.T.D. 280. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of Associated Cement Co. Ltd. (supra), the advantage secured by the taxpayer by incurring the expenditure was absolution or immunity from liability to pay municipal rates or taxes for a period of fifteen years and as the said liability was on revenue account, it was held by the Hon'ble Supreme Court that the expenditure incurred was of revenue nature as the advantage secured was in the field of revenue and not capital. In the present case, the expenditure incurred by the taxpayer company on imparting training to its employees in order to increase their efficiency in day-to-day working was in the revenue field and this being so and keeping in view the legal position emanating from the judicial pronouncements discussed above, we ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e heard both the parties and perused the material available on record. The AO had disallowed 2/3rd of the sales promotion expenses. In earlier years, as held by the ld. CIT (A) there was no disallowance on account of sales promotion expenses. The AO had not pointed out any expenditure which was not incurred for the purpose of the business. In the absence of any such findings, the deletion of disallowance made by the ld. CIT (A) is justified. Hence we do not find any infirmity in the order of the ld. CIT (A) deleting the addition. 11. The next issue for consideration relates to deleting the addition of Rs.1,12,61,787/- on account of depreciation on computers. The AO had restricted the disallowance of depreciation to 25 per cent treating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee. By now, it is a settled position of law that depreciation is allowable on computers including peripheral such as printers etc. at the rate of 60 per cent and hence, we do not find any reason to interfere in the order of the ld. CIT (A) on this issue. Ground No. 3 of the Revenue's appeal is also rejected." 13.2 Since the issue is squarely covered by the decision of the ITAT for AY 2004-05, respectfully following the precedent, it is held that computers and their peripherals will be eligible for depreciation at the rate of 60 per cent. Accordingly we do not find any infirmity in the order of the ld. CIT (A) allowing depreciation @ 60% on computers and their peripherals. 14. In the result, the appeal filed by the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
