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2021 (5) TMI 97 - AT - Income TaxDepreciation on bio metric devices - AO restricted the depreciation to 15% as against 60% claimed by the assessee - DR submitted that biometric devices can independently function and are not integral part of computers, therefore, argued that higher depreciation is not allowable - AR submitted that unless the bio metric devices are attached to the computer, the same cannot function independently and the output cannot be taken - HELD THAT:- Hon’ble Madras High Court in the case of CIT Vs. Cactus Imaging India (P) Ltd. [2018 (5) TMI 636 - MADRAS HIGH COURT] held that the computer printers being part of computer is eligible for higher rate of depreciation @60%. While dealing with the issue, the Hon’ble Madras High Court applying the rule of interpretation observed that entry in Appendix I Clause III(5) states computers including computer software and the notes under the Appendix defines the computer software in Clause7 to mean any computer program recorded on disc, tape, perforated media or other information storage device. The computer was not defined in the Act. Therefore, Hon’ble High Court viewed that if a particular article falls within the description by the force of words used, it is impermissible to ignore the word description. Thus, the Hon’ble High Court held that the printer is integral part of the computer and accordingly held that it is eligible for depreciation @60%. Following the decision of Hon’ble Madras High Court, in the instant case, thought the biometric kit is capable of capturing the data, it needs the computer for taking output. Hon’ble Mumbai Special Bench in the case of Data Craft India Ltd. [2010 (7) TMI 642 - ITAT, MUMBAI] considered the issues of computer and the computer systems and held that router is a networking device, whose software and hardware are customized to the task of routing and forwarding information and held that the switches can be classified as computer hardware when they are used along with the computer and when their functions are integrated with the computer. In simple words, when device used as the part of computer in its functions, then it would be termed as computer. If we apply the reasoning given by the Hon’ble Madras High Court and the decision of Hon’ble Special Bench of Mumbai Tribunal, biometric device is used along with the computer and fits also into the definition of computer. if the biometric system is detached from the computer, the same does not serve the purpose for which it is intended. Even in the biometric system also, wear and tear is very high like computer. As per the interpretation of Hon’ble Madras High court in the case supra the functioning of biometric device fits into the computer and eligible for higher rate of depreciation. Therefore, we hold that bio metric system is a computer and the depreciation required to be allowed at higher rate. Accordingly, we set aside the orders of the Ld.CIT(A) and allow the appeal of the assessee.
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