Income Tax Appellate Tribunal - Delhi
Birla Soft Ltd., New Delhi vs Department Of Income Tax on 31 August, 2010
IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH : 'A' NEW DELHI)
BEFORE SHRI G.E. VEERABHADRAPPA, HON'BLE VICE PRSIDENT AND
SHRI A.D. JAIN , JUDICIAL MEMBER
I.T.A. No.631/Del./2010
(Assessment Year : 2004-
2004-05)
DCIT, Circle 3(1), Vs. M/s Birla Soft Ltd.,
Ltd.,
th
New Delhi. 10 Floor, Prakash Deep Building,
7th Floor, Tolstoy Marg,
New Delhi.
(PAN/GIR No. : AAACB2769E)
(Appellant) (Respondent)
Assessee by : Ajay Vohra, Adv., Neraj Jain & Ms. Pinki Kapoor, Adv.
Revenue by : Shri Ashok Pandey, CIT(DR)
ORDER
PER A.D. JAIN, JM
This is department's appeal for assessment year 2004-05 contending that the CIT(A) erred in allowing depreciation @ 60% on computer accessories and peripherals amounting to `99,48,099 against @ 25% allowed by the AO, since the I.T. Rules allow 60% depreciation only on computer and computer software.
2. The assessee claimed deprecation at 60% on computer accessories and peripherals, namely, CD writers, printers, network cables, switches, racks, isolators, dividers, etc. The AO, while disallowing the claim and restricting it to 25%, observed that only computer and computer software are eligible @ 60% and the same cannot be extended to computer accessories and peripherals.
3. The CIT(A), by virtue of the impugned order, allowed the claim of 60% depreciation, following the Tribunal's order in the assessee's own case for assessment year 2003-04.
I.T.A. No.631/Del./2010 (A.Y. : 2004-05)
4. Challenging the impugned order, the Ld.DR has argued that the I.T. Rules allow 60% depreciation only on computer and computer software and that, therefore, the CIT(A) went wrong in allowing to the assessee depreciation @ 60% on computer accessories and peripherals; that depreciation @ 25% was rightly allowed by the AO.
5. The Ld.Counsel for the assessee, on the other hand, has contended that all equipments/parts which run with the help of computer system have to be treated as computer eligible for depreciation at the higher rate of 60%. Reliance has been placed on 'CIT vs. BSES Rajdhani Powers Ltd.'(supra), a decision rendered by the Hon'ble Delhi high Court (jurisdictional High Court) in I.T.A. No.1266 of 2010 vide judgment dated 31.8.2010 (copy placed on record).
6. Having heard the parties and having perused the material on record, we find the matter to be covered in favour of the assessee by 'BSES Rajdhani Power Ltd.'(supra), wherein agreeing with the view taken by the Tribunal, it was held that computer accessories and peripherals such as printers, scanners, servers, etc. form an integral part of the computer system; that the computer accessories and peripherals cannot be used without the computer; and that as such, they being part of the computer system, are entitled to deprecation at the higher rate of 60%.
7. In the present case, the assessee has claimed higher depreciation @ 60% on computer accessories and peripherals like CD writers, printer, network cables, switches, racks, isolators, dividers, etc. It has not been shown that this equipment can be used independently of a computer. They, as such, form an integral part of the computer system. Accordingly, in keeping with 'BSES Rajadhani Power Ltd.'(supra), they are entitled to higher depreciation @ 60%. Accordingly, finding no merit in the grievance sought to be raised by the department, the same is rejected.
2I.T.A. No.631/Del./2010 (A.Y. : 2004-05)
8. In the result, the appeal filed by the department is dismissed.
Order pronounced in open court on 29.04.2011.
Sd/- Sd/-
(G.E. VEERABHADRAPPA) (A.D. JAIN)
VICE PRESIDENT JUDICIAL MEMBER
Dated, April 29, 2011
SKB
Copy forwarded to:
1.Appellant
2.Respondent
3.CIT
4.CIT(A)-XX, New Delhi
5.CIT(ITAT), New Delhi.
AR/ITAT
3