TMI Blog2022 (8) TMI 1414X X X X Extracts X X X X X X X X Extracts X X X X ..... dering the fact and circumstances of the case and also the plea of the ld. Counsel for the assessee, we confirm the addition made towards the disallowance of cessation of liability u/s 41(1) of the Act and reject the ground taken by the assessee. - I.T.A. No.439/Chny/2022 - - - Dated:- 24-8-2022 - Shri G. Manjunatha, Accountant Member And Shri Sonjoy Sarma, Judicial Member For the Appellant : Shri Ashik Shah, C.A. For the Respondent by : Shri A.S. Sumanth, JCIT ORDER PER G. MANJUNATHA, ACCOUNTANT MEMBER: This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals) 18, Chennai, dated 25.02.2022, relevant to the assessment year 2017-18. 2. The appeal filed by the assessee is delayed by 31 days in filing the appeal before the Tribunal due to outbreak of COVID-19 pandemic and accordingly, the delay is condoned and admitted the appeal for adjudication. 3. Brief facts of the case are that the assessee, M/s. Financial Software and Systems Private Limited, is engaged in the business of Automated Teller Machine [ATM] management services and filed its return of income for the assessment year 2017-18 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s held as follows. 6. We have heard the rival submissions. The primary facts stated hereinabove remain undisputed and hence the same are not reiterated for the sake of brevity. he short point that arise for our consideration is as to whether the ATMs are eligible for depreciation at the rate of 60% treating it at par with the computer and computer peripherals. The ld DR vehemently argued that the ATM is not a computer and it is merely a cash dispensing machine. From the paper book submitted by the assessee, more particularly in pages 1 to 4, it is evident from the pictorial representation thereon, that the ATM has got a card reader, biometric reader, cash camera, consumer awareness mirrors, has got highly reliable note validation technology, having deposit capacity of 10000 bank notes minimum in secure deposit box, minimized jam rate with self diagnosis and failure recovery capability, etc. He also argued that ATM is built to consume upto 40% less energy than the previous generation of cash dispensers currently available in the Indian market and it delivers incremental power savings and sustainable deployment throughout the year. 6.1. We find that the issue under dispute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We find that the issue is dealt with by the co-ordinate bench of Delhi Tribunal in the case of Global Trust Bank Ltd. (supra), wherein it was held that : 7. ATM is the computerized telecommunication device that allows bank's customers to access the bank at places other than the normal bank without having to take the trouble to go to the bank in person and collect the cash as is done under the conventional method of withdrawing money from the bank. The ATM machines are computerized machines which not only allow the customers to withdraw money but they can check the account balance, pay bills, purchase goods and services, and therefore, unless it is computerized and linked with the main server, it is not possible to operate the ATM. 10. In this connection, a reference is also invited to the Information Technology Act, 2000 wherein section 2(i) defines the term computers which also includes computer network . The term computer network means the interconnection of one or more computers through the use of satellite, microwave, terrestrial line or other communication media and terminals or a complex consisting of two or more interconnected computers whether or not the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statute provides for the meaning to be imported specifically from another statute in respect of certain words and expressions. In the instant case, none is present and hence the reliance placed on the decision of Hon ble Karnataka High Court rendered in the context of Sales Tax Act supra does not advance the case of the revenue. 6.3. In any case, we find that the decision of Hon ble Bombay High Court on the very same issue is in favour of the assessee in the case of CIT vs Saraswat Infotech Ltd in Income Tax Appeal (L) No. 1243 of 2012 dated 15.1.2013. The question raised before the Hon ble Bombay High Court was as under:- b) Whether on the facts and circumstances of the case the ITAT was right in holding that depreciation on ATM is allowable @ 60% ignoring the fact that ATM is a cash dispensing machine with a projector and therefore is in nature of plant and machinery and therefore depreciation should be provided @ 15% ? The Hon ble Bombay High Court observed as under:- 3) The Assessing Officer was of the view that the UPS and ATMs would not fall under the category of computers and being part of plant and machinery / office equipment would be eligible for depreciat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us also, would rule the fort and accordingly we direct the ld AO to grant depreciation at the rate of 60% on ATMs for the Asst Year 2013-14 and the grounds raised by the assessee in this regard are allowed. This decision would apply with equal force for Asst Year 2014-15 also . The submission of the ld. CIT-Departmental Representative that higher rate of depreciation cannot be allowed on ATM machines as applicable to the computers cannot be accepted in view of the fact the Hon ble Karnataka High Court in the case of Diebold Systems (P.) Ltd. (supra) wherein while interpreting an entry in the schedule in Karnataka Sales Tax Act, 1957 on the basis of commercial parlance meaning, over technical meaning, holding thereunder that ATM is not a computer by itself but are electronic goods would not govern the interpretation to be assigned on the same issue arising under the Income-tax Act, 1961 in view of the settled principle of judicial interpretation, namely, that the words and expressions defined in one statute as judicially interpreted do not afford a guide to the construction of the same words or expression in another statute, unless both the statutes are pari materia legislatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iation and because of this, the depreciation claimed by the assessee in the return of income in the relevant assessment year is higher when the Assessing Officer has worked out the depreciation at 15% on WDV. If the Assessing Officer considered 60% of depreciation and worked out WDV then the depreciation worked out by the Assessing Officer will be higher than or equal to the depreciation claimed by the assessee. We find substance in the arguments of the ld. Counsel for the assessee that there is difference in working of depreciation because of the different rates considered by the assessee as well as the Assessing Officer. But, the fact remains that once the assessee is entitled for 60% of depreciation on ATM machines, the Assessing Officer has to work out the depreciation right from the beginning at 60% to compute WDV. Accordingly, we direct the Assessing Officer to allow 60% of depreciation and work out the opening WDV and compute the correct depreciation to be allowed for the impugned assessment year. 10. The next issue came up for consideration in ground Nos. 8 to 11 is addition towards cessation of liability under section 41(1) of the Act. The ld. Counsel for the assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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