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2018 (2) TMI 592

However, the ITAT Special Bench in the case of Datacraft India Ltd. (2010 (7) TMI 642 - ITAT, MUMBAI) had the occasion to consider the meaning of word ‘computer’. - In the present case, the concerned machine is a film projector. This is an optical instrument for projecting an image upon a surface. It is a device that projects a beam of light on to a screen for viewing a picture already programmed, fed and input. Though some elements of computer function are necessarily involved, the projector cannot be said to be a machine whose principal output/object/function is achieved only through computer function. Hence, that the film projector in this case cannot be said to be computer entitled for higher rate of depreciation of 60% applicable f .....

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income on FD of ₹ 18.68 lakhs. Because of claim of huge depreciation, loss has been shown. According to the Assessing Officer, the assessee has claimed depreciation on film projector claiming it as computer which is not correct. The Assessing Officer opined that the contention that projector is a computer is not acceptable. The purchase invoice reveals the fact that projector is installed at cinema theatre at Maxis mall, The computer is altogether different than projector . According to the Assessing Officer, it is also pertinent to note that the assessee himself vide his Audit report (Form 3CD), Part-B, Annexure-A (Particulars of depreciation allowable as the Income-Tax Act) has classified the projector equipment as Plant & Mach .....

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projector is run with server which is part and parcel of the computer . The function of the server is to process the information given to it, and the function of the digital projector to display the required information. Thus, it is just like a normal computer. However, the ld. Commissioner of Income Tax (Appeals) was not satisfied. He upheld the action of the assessing officer by observing as under: 3.3. I have considered the finding of the AO rival submission of the appellant, and have analysed the character of the film projector. It is very important to clarify that Film projector cannot be understood as computer . The computer is a programmed electronic device designed to accept data for prescribed mathematical and logical Operations at .....

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he Ld. A/R are not applicable. In the ase of DCIT Mumbai Vs. Data Craft India Ltd. (2010) 40 SOT 295 (MUM) (SB) ITAT), the issue was related to router and switches which were part and parcel of le computer hardware and other functions were found to be integrated one. In the case of CIT Vs. Bses Yamuna Powers Ltd.lTA 1267 of 2010 (Delhi High Court, depreciation was allowed at the rate of 60% on computer accessories and peripherals such as printers, scanners and server as these were integral part of the computer system responsible for completing the required working. Here is not the case like that. This film projector is independent, self content and having different character as it works as machines for projecting a beam of light or projecti .....

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d deprecation is applicable to computers. In this regard, the ld. Counsel of the assessee placed reliance upon the decision of ITAT Mumbai Special Bench in the case of DCIT vs. Datacraft India Ltd. [2011] 9 ITR(T) 712 (Mum) (SB) and the ITAT Bangalaore Bench decision in the case of Dy. CIT vs. UAE Exchange and Financial Services Ltd. [2016] 69 taxmann.com 84 (Bang-Trib). 8. Per Contra, the learned departmental representative relied upon the orders of the authorities below. 9. Upon careful consideration, I note that section 32 of the Act which granted depreciation allowance does not define the word computer . However, the ITAT Special Bench in the case of Datacraft India Ltd. (supra) had the occasion to consider the meaning of word computer .....

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of computer functions are necessarily involved, mechanical system cannot be said to be computer unless its principal function cannot be done without the aid of computer function. In other words, any machine or equipment cannot be described as computer if its principal output or function is the result of some sort of computer functions in conjunction with some non-computer functions. It was held that in order to be called as computer, it is sine qua non that the principal output/object/function of such machine could be achieved only through computer functions . 11. Now we examine the present case on the touch stone of the definition. In the present case, the concerned machine is a film projector. This is an optical instrument for projecting .....

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