TMI Blog2019 (2) TMI 993X X X X Extracts X X X X X X X X Extracts X X X X ..... ineness of the expenditure is not in dispute and the dispute is only regarding capital or revenue expenditure in nature decided the issue in favour of the assessee holding that the expenditure incurred by the assessee on glow sign boards and a neon sign boards is revenue in nature and allowable as deduction under section 37 (1) of the Act. Depreciation on POS terminals - Assessee claimed depreciation on POS terminals at 60% by treating the same as part of block of assets “computers” whereas the learned assessing officer treated the same as part of Plant and Machinery block and allowed depreciation at 15% - Held that:- As in assessee's own case Tribunal followed the decision in the case of Connaught Plaza restaurants [2014 (9) TMI 1105 - ITAT DELHI] wherein the issue of higher rate of depreciation on POS terminals was considered and the decision of the Tribunal granting 60% depreciation thereon was upheld. In the said decision Hon’ble jurisdictional High Court noticing that the CIT(A) in assessee’s own case for the assessment year 2008-09 held that the assessee was entitled to the depreciation at 60% on the ground that the equipment was akin to a computer and such a finding was c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctronic recharge coupons, collection of payments of post-paid bills of various telecom operator and ticketing and they have pioneered the idea and execution of electronic virtual distribution (suing POS/WAB/SMS) of services like prepaid airtime, DTH/broadband payments on behalf of service providers. For the assessment year 2008-09 the assessee filed their return of income on 13/10/2008 declaring a total loss of ₹ 222,451,028/-. By order dated 28/12/2011 under section 143(3) of the Act, Ld. assessing officer assessed the total loss at ₹ 179,732,770/-, by making additions, insofar as this appeal is concerned, on account of the disallowance of ₹ 62,17,290/- on account of legal, professional and consultancy expenses, disallowance of ₹ 52,16,124/-on account of advertisement and marketing expenses, disallowance of depreciation of ₹ 84,10,239/-on POS terminals, disallowance of depreciation of ₹ 74,713/- on UPS and disallowance of ₹ 16,24,375/-under section 14 A of the Act, which the Ld. CIT(A) deleted in appeal. Revenue, therefore, filed this appeal. 3. Insofar as the disallowance on account of legal, professional and consultancy expenses is co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee were of enduring nature or brief period and the learned assessing officer was not confronted on this aspect nor the Ld. CIT(A) dealt deeper into these aspects, but he simply relied on the self-serving statement of the assessee, and without a steadying the observations of the auditors in the audit report as they are required to make in para 17 (a) of the audit report as to whether any capital expenditure was debited to the profit and loss account which was not done by either of the authorities. Lastly, she contended that the expenses on account of software have been claimed by the assessee so the onus is on the assessee to satisfy the learned assessing officer as to his claim so that it could be allowed by the learned assessing officer and in the absence of any material whatsoever produced by the assessee the expenditure was rightly treated as capital by the learned assessing officer. 6. Per contra, it is the submission on behalf of the assessee that similar questions have arisen in the case of the assessee for the assessment years 2008-09 to 2010-11 which were disposed of by the Ld. CIT(A) vide orders dated 9/3/2015 and the Revenue preferred appeals against the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness, the assessee encourages expenses on advertisement on glow sign, signboard, posters etc and incidental expenditure on installation of glow sign, signboard etc at a retail outlets; and such an expenditure is, therefore, not in the nature of capital expenditure. 9. It is the argument of the Ld. DR that the learned assessing officer on verification of payments to the five parties observed that the expenses were broadly in the nature of installation of board, installation of data cables which can by no means considered as revenue expenditure since they gave enduring benefit to the assessee, and, therefore, the said expenditure was rightly treated as capital expenditure by the learned assessing officer to disallow the same. Ld. CIT(A), however, held that the assessee made payments IB W communication (P) Ltd which is contrary to the facts on record which shows that the payments were made to five parties. Ld. DR further submitted that the discussion made in the impugned order revolves around the advertisement expenses only and in only one paragraph there is discussion about the expenses on glow sign words, which contention the assessee never advanced before the learned assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn case for an earlier year, we find it difficult to deviate from the view taken by a coordinate Bench of this Tribunal in assessee s own case for the subsequent year, namely, 2009-10. We, accordingly, respectfully following the decisions of the Hon ble jurisdictional High Court and also the view taken by a coordinate Bench of this Tribunal in assessee s own case for the assessment year 2009-10 hold that the findings of Ld. CIT(A) on this aspect do not suffer any infirmity and no interference by us is warranted. We accordingly dismiss ground No. 2 of revenue s appeal. 13. Third ground in this Revenue s appeal is in relation to the depreciation on POS terminals at 60%. Assessee claimed depreciation on POS terminals at 60% by treating the same as part of block of assets computers whereas the learned assessing officer treated the same as part of Plant and Machinery block and allowed depreciation at 15%. Ld. CIT(A) followed the decision of a coordinate Bench of this Tribunal in the case of ACIT vs. M/s Connaught Plaza Restaurants (P) Ltd in ITA No. 5466/Del/2013 and allowed depreciation at 60%. 14. It is the argument of the Ld. DR that the POS terminals are very clearly dist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in the case of M/s Dinamalar, Tirunelveli vs. ITO in TCA No. 624 of 2016 where the assessee claimed depreciation on Canon lide, scanner, computerised accounting and stacking machines, transportation charges, CTP machine, scanner, Cisco router, modem, computerised counting and stacking (F/C), CTP machine (clearing charges), CTP machine (erection) treating it as computers. Ld. assessing officer disallowed the higher claim of depreciation at 60% by holding that the said machinerieswere computerised machines and were not computers classified in the depreciation table. 17. Ld. CIT(A), in the case of M/s Dinamalar (supra), upheld the decision of the learned assessing officer by observing that increasingly organisations are moving towards computerised integrated manufacturing, where more and more computers, robots, and microprocessors are used in conjunction with the machines; that such machines cannot be called as computers even though computer is an integral and a dedicated part of the whole machine; that computer in the machine cannot be used for any other purpose; that for example a computerised numerically controlled lathe machine has a computer and microprocessor to control t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ression computers cannot be twisted and carried too far to vitiate the intent of legislature. She, however, further submitted that there is need to verify whether the POS terminals were bought as computers or POS terminals. 20. Per contra it is the submission on behalf of the assessee that all these contentions are considered by the higher forum in a plethora of decisions and while granting relief to the assessee for the assessment year 2009-10 in ITA 3812/Del/ 2015 while upholding the order of Ld. CIT(A), a coordinate Bench of this Tribunal followed the ratio of the Delhi Ld. PCIT vs. Connaught Plaza Restaurants (P) Ltd in ITA No. 542/2016 by order dated 20/9/2016. In view of the binding precedent laid down by the Hon ble jurisdictional High Court, there is nothing illegality or irregularity in the conclusions reached by the Ld. CIT(A) and grant depreciation at 60% on POS terminals. 21. On a careful reading of the order dated 7/1/2019 in ITA No. 3812/Del/2015 in assessee s own case for the assessment year 2009-10, we find that the Tribunal followed the decision of the Hon ble Delhi High Court in the case of Connaught Plaza restaurants (supra) wherein the issue of higher rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar under consideration no exempt income is derived by the assessee. In view of the decisions of the jurisdictional High Court in the cases of Ld. PCIT vs. McDonalds India Ltd (2019) 101 taxmann.com 86, Cheminvest Ltd vs. CIT (2015) 378 ITR 33 and Ld. PCIT vs.IL FS energy development company Ltd (2017) 399 ITR 483 in the absence of any exempt income earned by the assessee in the financial year relevant to the concerned assessment year, no disallowance could be made under section 14 A of the Act. Issue is no longer res Integra and well settled by the aforesaid judgements. We therefore do not find any reason to interfere with the findings of the Ld. CIT(A) on this aspect and by uphold the same while dismissing ground No. 5 of the appeal. ITA No. 3766/Del/2015. 26. This appeal relates to the assessment year 2010-11. Issues involved in this appeal are relating to the depreciation allowable on POS terminals and the allowance of the expenditure on account of legal, professional and consultancy expenses. These two issues are dealt with in assessee s own case for the assessment year 2008-09 in the preceding paragraphs vide grounds No. 3 and 2 respectively and also by the coordinat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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