TMI Blog2016 (1) TMI 1127X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer to grant depreciation @ 80% to the assessee on these above stated items. Claim of depreciation on computers and computer peripherals - Held that:- Only computer peripherals can be at the most considered as computers for the purpose of claiming depreciation at the rate prescribed in New Appendix-III(5) of the Income Tax Rules. All other items fall in the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt u/s.143(3) of the Act was completed on 28.03.2014 wherein the Ld. Assessing Officer made certain addition due to disallowance of higher depreciation claimed by the 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 stated category and therefore disallowed the same and granted depreciation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dition 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 be allowed. The Ld. D.R on the other hand argued in support of the orders of the Revenue. 4.4 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant 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, Appellant stated that it is based on the function it performs. 5.6 With regard to the 2 machine assessee has recorded the name in the accounts as, CTP machine, It was explained during appeal that CTP means Computer to Printer. This is the latest machine wherein the draft of the layout of the newspaper is made on the computer which is then transmitted to the printing press. This machine replaces the earlier method of manual typesetting and preparing the block for printing press Appellant was asked to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... But the machines cannot be called as computers even though computer is an integral and dedicated part of the whole machine. That computer in the machine cannot be used for any other purpose. For example a CNC (Computerized Numerically Controlled) lathe machine has a computer and microprocessor to control the movement of the spindle but that cannot make a CNC lathe as a computer. It still does machining, cutting metal and creating shapes in the metal but it is more automated and driven by preprogrammed instructions through the computer. it is 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mputer as one of the components. 5.13 In view of this factual and legal position, it is held that out of the Assets listed by the AC, only scanner, sisco router modem is, eligible for depreciation at 60%. Rest of the assets listed by the AC form part of plant and machinery and thus is eligible for depreciation only at 15%. The AO s decision to treat the machines not as computers but as Plant Machinery and restricting the claim of depreciation to 15% on these machines is in order and the assessee s arguments are rejected. 5.3 We agree with the view of the Ld. CIT (A). Only computer peripherals can be at the most considered as computers for the purpose of claiming depreciation at the rate prescribed in New Appendix-III(5) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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