TMI Blog2010 (12) TMI 606X X X X Extracts X X X X X X X X Extracts X X X X ..... nners and server etc. form an integral part of the computer system - In fact the computer accessories and peripherals cannot be used without the computer - Consequently, as they are the part of the computer system, they are entitled to depreciation at the higher rate of 60%. - Decided in favour of assessee. - ITA No. 4746/Del/2010 - - - Dated:- 31-12-2010 - G.E. Veerabhadrappa, I.P. Bansal, JJ. Amrender Kumar, Sr. DR, for the Appellant B.D. Sharma, Adv., for the Respondent ORDER I.P. Bansal: This is an appeal filed by the Revenue. It is directed against the order of CIT(A) dated 10.8.2010 for AY 2007-08. 2. Grounds of appeal read as under:- "1. The ld.CIT(A) has erred in law and on facts in deleting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e details were furnished before the AO. The directors were allocated specific territories to boost the sales in their respective territories and thus, the incentive was paid with respect to their performance and details regarding sales effected in respective territories were also furnished in the shape of charts. However, the AO did not accept that claim of the assessee and has applied provisions of Section 36(1)(ii). The AO is of the view that all these directors being major shareholders in the company can receive this amount as profit or dividend and if it is so, then the amount cannot be allowed as deduction in the hands of the assessee as per provisions of Section 36(1)(ii). He observed that though the net profit of the assessee company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excessiveness can be seen under Section 40A(2) only. Applicability of Section 40A(2) was not even the case of the AO. Commission paid to the directors was part of the remuneration of the directors. Referring to the decision of Hon'ble Supreme Court in the case of Gestetner Duplicators (P) Ltd. vs. CIT - 117 ITR 1, it was observed that commission paid as percentage of fixed turnover is nothing but assessable salary and thus, it was held that Section 36(1)(iii) has got no application. Reference was also made to the decision of Hon'ble Supreme Court in the case of Shahjada Nand and Sons vs. CIT - 108 ITR 358 wherein it has been held that commission paid to employees is allowable and there is no need for any contractual obligation and extra se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Revenue is dismissed. 8. So as it relates to ground No.2, the facts are that during the course of assessment proceedings, the AO noted that the assessee had claimed 60% depreciation on computer accessories and peripherals. The assessee was required to explain as to why the same should not be restricted to 15%. It was the submission of the assessee that rate provided for computers and computer software are applicable to the computer accessories and peripherals. However, the AO rejected the claim of the assessee and added a sum of Rs.13,725/- to the income of the assessee on account of difference in rate of depreciation on such items. Learned CIT(A) has granted relief to the assessee. Following the decision of ITAT in the case of Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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