TMI Blog2020 (3) TMI 802X X X X Extracts X X X X X X X X Extracts X X X X ..... activity of an assessee? Is it a tool of his trade with which it carries on his business? If the answer is in affirmative, it would be a computer and moreover the issue was already decided in favour of the assessee in assessee's own case by the Co-ordinate Bench of the Tribunal [ 2019 (6) TMI 1454 - ITAT CHENNAI] and hence, we do not find any reason to depart from the findings of the Co-ordinate Bench of the Tribunal. Accordingly, we direct the Assessing Officer to allow depreciation @60% as claimed by the assessee. Thus, the appeal filed by the assessee for assessment year 2015-2016 stands allowed. - I.T.A. Nos.2126 & 2127/CHNY/2019 - - - Dated:- 17-3-2020 - Shri Inturi Rama Rao, Accountant Member And Shri Duvvuru RL Reddy, Judicial Member For the Appellant : Shri. Sriram Seshadri, C.A. For the Respondent : Shri. Abani Kanta Nayak, CIT. ORDER PER BENCH: These are appeals filed by the assessee directed against common order of ld. Commissioner of Income Tax (Appeals)-6, Chennai, ( CIT(A) for short) dated 29.04.2019 for the Assessment Years 2015-2016 and 2016-2017. 2. Since, the identical facts and issues are involved in these appeals, we pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e return of income for the AY 2015-16 was filed on 24.11.2015 disclosing loss of ₹ 5,35,75,794/-. Against the said return of income, the assessment was completed by the Deputy Commissioner of Income Tax, Corporate Circle 2(1), Chennai (hereinafter called AO ) vide order dated 21.12.2017 passed u/s. 143(3) of the Income Tax Act, 1961 (in short the Act ) at total income of H40,00,83,210/-. While doing so, the AO allowed depreciation on ATM machines @15% as against the claim of the assessee at 60%, rejecting the contention of the assessee that ATM machine falling within the meaning of computer qualifying for depreciation @60% by placing reliance on the decision of Hon ble Karnataka High Court in the case of Diebold Systems (P) Ltd vs. Commissioner of C.T. (2006) 144 STC 59, under Karnataka VAT Act, 2003. 6. Being aggrieved by the above additions, an appeal was preferred before the ld. CIT(A), who vide impugned order confirmed the action of the Assessing Officer. 7. Being aggrieved by the order of the ld. CIT(A), the appellant is in appeal before us in the present appeal. It is contended before us that the issue in the present appeal is covered in favour of assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TM is a computer terminal activated by a magnetically encoded debit card that allows a person to make deposits to and withdrawals from his account pay bills, transfers money between his account at any time. The inbuilt computer software therein allows the person to make financial transactions and check the account balances. It was the submission of the Learned AR that inside every ATM there is a computer which is not very different from any other personal computer but the basic function of connecting a person to the bank ATM network and accessing his account information are done by the ATM and the software used in the ATM is also the same software which is used in the computer. We also find that similar issue has been addressed by the Special Bench of Mumbai Tribunal in the case ofDy. CIT v. Datacraft India Ltd. [2010] 40 SOT 295 wherein the definition of 'computer' given by the Information Technology Act, 2000 has been discussed and it has been held that the computer is to perform logical, arithmetical and memory functions on data etc and it is not only the equipment which perform such functions that could be called as computer but includes all input and output devices whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 2004-05, we find that this decision was rendered on 30.6.2010 and thereafter much water has flown on the impugned issue by the decisions of Delhi and Mumbai Tribunal and the decision of Bombay High Court. Respectfully following the aforesaid judicial precedents, we have no hesitation in directing the Learned AO to allow depreciation at the rate of 60% on ATMs. Accordingly, the ground no. 5 raised by the assessee for the Asst Years 2005-06 and 2006-07 are allowed. 6.2. We also find that the decision relied upon by the ld DR on Hon ble Karnataka High Court supra was rendered in the context of Karnataka Sales Tax Act and not under Income Tax Act. In this regard, we find that the Hon ble Supreme Court in the case of Jagatram Ahuja vs CIT reported in 246 ITR 609 (SC) had observed as under:- 23. We find that Kantilal Trikamlal's case (supra)supports the view taken in N.S. Getti Chettiar's case (supra). Added to this, section 2(15) of the Estate Duty Act, defining 'property' carne up for consideration in Kantilal Trikamlal's case (supra) . We may state here itself that the word sand expressions defined in one statute as judicially interpreted do not aff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tem and regulate the flow of the power to avoid any kind of damage to the computer network due to fluctuation in power supply which could lead to loss of valuable data. The Tribunal relied upon the decision of the Delhi High Court dated 20/1/2011 in the matter of CIT v. Orient Ceramics and Industries Ltd in which UPS was held to be the part of the computer system and depreciation at 60% was allowed. Similarly, so far as ATMs are concerned, the Tribunal on finding of fact concluded that ATM cannot function without the help of computer and would be a part of the computer used in the banking industry. Reliance was placed by the Tribunal upon the decision of the Delhi Bench of Tribunal in the matter of DCIT v. Global Trust Bank (ITA No. 474/D/09) wherein it has been held that ATM was a computer equipment and depreciation @ 60% was allowed. So far as the use of software is concerned, the Tribunal records a fact that the evidence of the use of the software on 31/3/2008 was produced before the Tribunal. Thus, the Tribunal held that depreciation @ 30% on software was rightly claimed. 6) We note that the Tribunal has arrived at a finding of fact on all the three questions. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot similar, i.e., pari materia legislations. In the matter of interpretation of an entry under the sales tax laws Trade Test or Common Parlance Test is applied while considering whether a particular item/goods fall in an entry or not, whereas under the Income-tax Act, 1961, particularly when considering whether an item is to be considered as plant and machinery and/or building or any of the items specified in the Appendix to the Incometax Rules, 1962, functional test is the decisive test, as ruled by the Hon ble Supreme Court of India in numerous cases, one such being CIT vs. Anand Theatres (2000) 244 ITR 192/110 Taxman 338. In other words, the test would be: Does an ATM fulfil the functions of a Computer in the business activity of an assessee? Is it a tool of his trade with which it carries on his business? If the answer is in affirmative, it would be a computer and moreover the issue was already decided in favour of the assessee in assessee s own case by the Co-ordinate Bench of the Tribunal and hence, we do not find any reason to depart from the findings of the Co-ordinate Bench of the Tribunal. Accordingly, we direct the Assessing Officer to allow depreciation @60% ..... X X X X Extracts X X X X X X X X Extracts X X X X
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