TMI Blog2012 (9) TMI 445X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Disallowance of Depreciation on UPS - ITAT allowed @ 60% treating the same as computers - Held that:- As decided in CIT Vs. BSES Yamuna Power Ltd [2010 (8) TMI 58 - DELHI HIGH COURT] that computer accessories and peripherals form an integral part of a computer system and, therefore, depreciation has to be allowed at the rate of 60% - as that the higher depreciation was not only allowed in respect of UPS but also in respect of printers, switches etc. - in favour of assessee. Disallowance of deduction of 1/5th of the expenses relating to legal and professional expenses relating to closure of the Daruhera unit - ITAT allowed it - Held that:- As decided in C.I.T v. D.C.M [2009 (1) TMI 2 - HIGH COURT DELHI] the expenditure incurred on p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... more issues were raised vide questions (D) to (F). The said questions read as under:- Assessment Year 2005-06 (D) Whether the Tribunal erred in allowing a deduction of expenditure under section 35DDA of the Act in respect of payments made under the voluntary retirement scheme floated by the assessee only in respect of the Daruhera Plant? (E) Whether the Tribunal erred in concluding that the scheme, to be eligible for deduction under section 35DDA of the Act did not have to comply with the conditions of Rule 2BA of the Rules? (F) Whether the Tribunal erred in allowing depreciation in respect of UPS @ 60% treating the same as computers? (G) Whether the Tribunal erred in deleting the disallowance of 10% of expenditure on advertise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of Section 35DDA of the Income Tax Act, 196, we are entirely in agreement with the findings recorded by the tribunal in paragraph 6.3. 6. Rule 2BA is in the form of guidelines for the purpose of Section 10(10C), which relates to taxation of income/amount received by an employee under VRS scheme. The said Rule does not deal with the expenditure incurred by the employer when the assessee makes payment under the VRS scheme formulated by them. The treatment of expenditure or outgoing of the employer has to be dealt with under Section 35DDA and the prescribed rules, if applicable. Rule 2BA, which is applicable to the recipient i.e. the employee, cannot be applied. On this aspect, therefore, we do not think that any substantial question of la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent year. Thus, the direction of the tribunal has the revenue effect and is applicable to the assessment year 2005-06 also. The tribunal in paragraph 7.3 and 7.4 has dealt with the issue and directed the Assessing Officer to allow 1/5th of the expenses in the assessment year in question and balance in the next four assessment years in equal installments. The case of the Revenue was that this was capital expenditure as it related to expenses incurred in connection with the VRS scheme. The expenditure, which was incurred, was for obtaining medi-claim insurance for retired employees, contribution made to superannuation fund, security charges for additional security, travelling expenses etc. We may note here that business of the assessee has no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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