Income Tax Appellate Tribunal - Delhi
Globe Capital Market Ltd., New Delhi vs Department Of Income Tax on 27 March, 2012
INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'C': NEW DELHI
BEFORE SHRI S. V MEHROTRA, ACCOUNTANT MEMBER
AND
SHRI A. D. JAIN, JUDICIAL MEMBER
ITA No. 2926/Del/2012
Assessment Year: 2008-09
ACIT, M/s. Globe Capital
Circle-12(1) Market Ltd., 609, Ansal
New Delhi. Vs. Bhawan, K. G. Marg,
New Delhi-110001
PAN AAACG4267G
(Appellant) (Respondent)
Appellant by : Shri Satpal Singh, Sr. DR
Respondents by: Sri Ved Jain, CA & Shri A. K. Agarwal, CA
ORDER
PER S. V MEHROTRA The Department has filed this appeal against the order dated 27.03.2012 of Ld. CIT(A)-XI, New Delhi for the assessment year 2008-09.
2. Brief facts of the case are that the assessee company is a member of National Stock Exchange and depository participant of NSDL and CDSL. It had filed its return declaring income of Rs. 1,12,61,88,270/-. The assessment was completed on total income of Rs. 112,85,33,870/-, inter alia, making following additions:-
Page No. 2 ITA No. 2926/Del/2012
1. Disallowance of Rs. 2 lakhs on account of non-verifiability of various expenses incurred by assessee.
2. Disallowance of Rs. 3,04,397/- on account of difference in rate of depreciation of computer peripherals allowed by Assessing Officer @15% as against 60% claimed by the assessee.
3. Disallowance of Rs. 12,04,205/- on account of difference in rate of depreciation allowed by Assessing Officer @ 15% as against of 60% claimed by the assessee in regard to computer software.
3. Ld. CIT(A) deleted all the aforementioned three disallowances.
4. Being aggrieved with the order of the Ld. CIT(A), the department is in appeal before us and has taken the following grounds of appeal:-
"1.Whether Ld. CIT(A) was correct on facts and circumstances of the case and in law in deleting and in law in deleting the disallowance of Rs. 2,00,000/- made by the AO out of expenses.
2.Whether Ld. CIT(A) was correct on facts and circumstances of the case and in law in deleting the disallowance of Rs. 3,04,397/- made by the AO on account of depreciation on computer peripherals.
3. Whether Ld. CIT(A) was correct on facts and circumstances of the case and in law in deleting the disallowance of Rs. 12,04,205/- made by the AO on account of depreciation on computer software.
4. The appellant craves leave, to add, alter or amend any ground of appeal raised above at the time of the hearing."
5. Brief facts apropos ground No. 1 are that the assessee had debited various expenses in its profit and loss account. The assessing officer has observed that on examination of the bills and vouchers, it was found that some of the bills and vouchers were self generated assessee which could not substantiate fully. He, Page No. 3 ITA No. 2926/Del/2012 therefore, disallowed Rs. 2 lakhs on estimated basis. Ld. CIT(A) deleted the addition, inter alia, observing that the disallowance was illegal.
6. We have considered the submissions of both the parties and have perused the material on record. Admittedly, the assessing officer has not pointed out any specific instance of non-verifiability of expenses. He has not pointed out under which head the disallowance was made. The assessee company had itself declared taxable income of Rs. 1,12,61,88,270/- and, therefore, a meager disallowance of Rs 2 lakhs, without any basis, was wholly unwarranted. Assessing officer has not brought on record any material to justify the disallowance of Rs. 2 lakhs. The disallowance made on estimated basis cannot be sustained. Ld. CIT(A) has rightly relied on the following decisions in this regard:
" i) Umacharan Shah & Bros Vs. CIT (1959) 37 ITR 271 (SC)
ii) Lalchand Bhagat Ambica Ram Vs. CIT (1959) 37 ITR 288 (SC)
iii) CIT Vs. Kulwant Rai 291 ITR 36 (Delhi High Court) by following the judgement in the case of Dhakeshwari Cotton Mills Ltd. Vs. CIT (1954) 26 ITR 775 (SC)
iv) CIT Vs. Mrs. Sunit Vachani 184 ITR 121 (Delhi High Court)
v) CIT Vs. Anupam Kapoor 299 ITR 180 (P&H High Court)"
We, therefore, do not find any infirmity in the order of Ld. CIT(A). In the result this ground is dismissed.
7. Apropos ground No. 2, the assessing officer noticed that the assessee had claimed depreciation @60 % for assets held for more than 180 days and 30 % for assets held for less than 180 days in Page No. 4 ITA No. 2926/Del/2012 respect of various additions under the head computers. He pointed out that the additions under the head 'computers' included UPS, printer, networking routers etc. which were only 'peripherals to computers' and not the 'computers'. He further pointed out that the peripherals are intrinsic parts of plant and machinery on which depreciation at the rate of 15% was allowable. He, therefore, made an addition of Rs. 3,04,397/- as under:-
(a) More than 180 days: 3,02,020/- @ 15 %= Rs. 45,303/-
(b) Less than 180 days: Rs. 7,48,837/-@ 7.5%= Rs. 56163/-
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Total Rs. 101466/-
Assessee's claim of depreciation to the extent of Rs. 304397/- (Rs. 405863- 101466) is disallowed on these items.
8. Ld. CIT(A) deleted the disallowance following the decisions of Delhi Tribunal in the case of ACIT Vs. Container Corporation India Ltd. in ITA Nos 2851 & 3680/Del/2007.
9. Both the parties agreed that now this issue is no more res- integra in view of the decision of the jurisdictional Hon'ble Delhi High Court in following cases :-
"i. BSEC Rajdhani Powers Ltd. (Del) ITA No. 1266/2010, dated 31.03.2010 ii. CIT Vs. Sony India Pvt. Ltd., ITA No. 1178/2011 iii. CIT Vs. Datacraft India Ltd. (2010) 133 TTj 377 iv. Expeditors International (India) (P.) Ltd. Vs. Addl. CIT (2008) 13 DTR (Del.) (Trib.) 435 v. Haworth (India) (P.) Ltd. Vs. DCIT (2011) 11 taxmann.com 76 (Delhi) vi. Carlton Overseas (P.) Ltd. Vs. DCIT (2011) 14 taxmann.com 97 (Delhi) vii. ACIT Vs. Chrys Capital Investment Advisors India Pvt. Ltd.
45 SOT 71 (Delhi) (URO)"
Page No. 5 ITA No. 2926/Del/2012 Hon'ble Delhi High Court in the case of BSEC RAJDHANI POWERS Ltd.(ITA NO. 1266/2010) has held that computer accessories and peripherals such as, printers, scanners and server etc. form an integral part of the computer system as they cannot be used without the computer. Hence, same are the part of the computer system and are entitled to depreciation at the higher rate of 60%."
10. Respectfully following the decision of Hon'ble Delhi High Court this ground is dismissed.
11. Apropos ground No. 3, the assessing officer observed that the addition under the head computer software would be entitled for depreciation @ 15%. It cannot be disputed that computer software is integral part of computer system and, therefore, depreciation @ 60% was to be allowed. Moreover, rate of depreciation of computer software has been specifically provided @ 60% in New Appendix-I Part A (III) (5) annexed to Rule 5 to the Income-tax Act, 1962.
12. We, therefore, do not find any infirmity in the order of Ld. CIT(A) on this issue.
13. In the result this ground is dismissed.
In the result the departmental appeal is dismissed. Order pronounced in the open court on 28.06.2013
-Sd/- -Sd/-
(A. D. JAIN) (S. V MEHROTRA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated 28 /06/2013
A K Keot
Page No. 6 ITA No. 2926/Del/2012
Copy forwarded to
1. Applicant
2. Respondent
3. CIT
4. CIT (A)
5. DR:ITAT
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