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M/s. Dinamalar, Versus The Income Tax Officer, Ward II (1) , Tirunelveli.

2016 (1) TMI 1127 - ITAT CHENNAI

Claim of depreciation on electrical equipments - Held that:- We have heard both the parties and carefully perused the materials available on record. We find merit in the contention of the Ld. A.R. Control panel board and Transformers are more or less items either falling in the category of “Instrumentation and monitoring systems” as stated in the depreciation schedule in New Appendix-IIII-( 8)(ix)B of Income Tax Rules or “Electrical equipment” as stated in the New Appendix-I-III-(8)(ix)E under t .....

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he category mentioned in New Appendix-III(1) of the Income Tax Rules as held by the Ld. CIT (A). Therefore, we do not find any reason to interfere with the order of the Ld. CIT (A) on this issue who has elaborately considered this matter in his order. - I.T.A. No. 2829/Mds./2013 - Dated:- 14-1-2016 - SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER Appellant by: Mr. S. Sridhar, Advocate Respondent by: Mr. P, Radhakrishnan JCIT, D.R O R D E R PER A. MOHAN ALANKA .....

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grant of depreciation at 15% by the Revenue, since these equipments cannot be classified in any of the items mentioned in the depreciation table New Appendix-I-III-(8)(ix) of the Income Tax Rules. (ii) The Ld. CIT(A) has erred in sustaining the addition of ₹ 17,13,508/- & ₹ 9,01,181/- being the disallowance of the claim of depreciation at 60% and the grant of depreciation at 15% by the Revenue since these items cannot be considered as Computers falling in Appendix-I - III (5) of .....

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assessee on certain items. 4.1 Ground No.1: - the claim of depreciation on electrical equipments. The assessee had claimed 80% depreciation against the control panel board and transformer treating it to be electrical equipments classified under the head B. Instrumentation and monetary systems for monitoring energy flows in the depreciation table New Appendix-I-III-(8)(ix)B which works to ₹ 1,80,229/-. The Ld. Assessing Officer was of the view that these items would not fall in the above s .....

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ordingly the excess depreciation of ₹ 1,80,229/- calculated above is disallowed and added to the total income. 4.2 - 4.5. The definition of a transformer as per Wikepedia is as under:- A transformer is an electrical device that transfers energy between two or more circuits through electromagnetic induction and are designed to efficiently change AC voltages from one volte level to another increase or decrease. 4.6. Appellant is arguing that depreciation of 80% is allowable under the Act for .....

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ict the depreciation is in order and the addition is upheld. 4.3 The Ld. A.R. reiterated his argument made before the Revenue on the earlier occasion by stating that the control panel board and transformer can be classified under the head B. Instrumentation and monetary systems for monitoring energy flows as mentioned in New Appendix-I-III-(8)(ix)B and therefore the assessee has rightly claimed depreciation @ 80% as provided under the Act. Hence it was pleaded that the claim of the assessee may .....

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pendix-I-III-(8)(ix)E under the head Electrical Equipments taking into account of the principles of EJUSDEM GENERIS. Therefore we hereby direct the Ld. Assessing Officer to grant depreciation @ 80% to the assessee on these above stated items. 5.1 Ground No.2: - the claim of depreciation on computers and computer peripherals. The assessee had claimed depreciation on the following items viz., Cannon Lide, Scanner, Computerized counting & stacking machines, Transportation charges, CTP Machine, .....

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epreciation for rest of the items @ 15% by holding as under:- 5.5 Surprisingly, the name of the machine in the invoice is Logic stacker with strapper . Assessee classified this machine with the description computer counter and stacker. It is surprising how Appellant has modified the name of the machine. Normally the name of the machine in the accounts should always be what is indicated in the invoice and in: my view Appellant has no choice of writing the description as it wishes. When questioned .....

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ked to produce copy of invoice of this machine which is enclosed as annexure 2 of this order This machine is imported from Taiwan and name in the invoice as Register TY-800 AOL Vision plate punching and bending system . The invoice mentions that Register TY-800 AOL Vision plate punching and bending system is a machine with 3 different components as under: a) One TY-800 AOL Auto Vision Punching and Bending; b) One Standard Conveyor; c) One plate stacker. 5.7 Customs authorities have also classifi .....

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et. Normally the name of the machine in the accounts should always be what is indicated in the invoice and in my view Appellant has no choice of writing the description as it wishes. When Appellant questioned stated that it is based on the function it performs. 5.9 Increasingly organizations are moving towards computerized integrated manufacturing, where more and more computers, robots, and microprocessors are used in conjunction with the machines. But the machines cannot be called as computers .....

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still a machine assisted by a computer and microprocessor. 5.9 As per the schedule of depreciation, the rate 60% .of depreciation is allowable only to computers and at best may include accessories like servers, scanner sisco router modem etc as held in the decisions cited by the Appellant but can never include the 2 machines acquired by the assessee. The description of the machines as per the invoice is different and Appellant s decision to use its own names adding the word computer is incorrec .....

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