TMI Blog2023 (1) TMI 1291X X X X Extracts X X X X X X X X Extracts X X X X ..... t be computers but wherever it is found that the device is not used independent of the computer system and the purpose of audio visual conferencing and video streaming, the same shall be treated as computers and wherever it is used independently for any other purpose it shall be treated as plant and machinery. The AO, shall, thus allow depreciation at the rate of 60% on the equipment which could be classified as computer and at the rate of 15% on the equipment which could be classified as plant and machinery. This issue is accordingly set aside to the file of the AO for re-adjudication Accordingly, in the interest of justice, we remit the file to the AO. AO is directed to follow the ratio laid down by the ITAT in the aforesaid order. Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see charged depreciation of Rs. 42,943/- at the rate of 30% (half of the rate of 60% as the assets were put to use for less than 180 days) on the book value of Rs. 1 43,145/- of Cisco IP Phone in the block of plant and machinery. It may be noted here that the rate of depreciation is 15% on mobile phones in the block of plant and machinery and the assessee should have been applied the rate of 7.5% (half of 15%). The assessee was asked by notice u/s 142(1) dated 05.] 2.20] 8 as to why should the depreciation rate be not applied @ 15% instead of 60% on Cisco Phone and excess of depreciation claim be disallowed and added back to the income. The assessee company submitted vide reply dated 13.12.2018 that a Cisco IP Phone is a device, which accep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t independent of the computer system used in the audio visual conferencing and video streaming activity. But did the assessee use them independently is the question. In view of the same, we are of the opinion that the AO, instead of classifying the entire equipment as plant and machinery and not computer, is required to examine each item in detail as regards its functional dependency on the computer and its independent existence. The items which are, functional dependent on computers are definitely part of computer and the items with independent existence may not be computers but wherever it is found that the device is not used independent of the computer system and the purpose of audio visual conferencing and video streaming, the same shal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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