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(iv) Whether the tribunal is correct in law to accept the change in the method of accounting adopted by the assessee without taking into account the provisions of sale of goods Act as per which the delivery is the point of time when the sale is complete?

2. Facts giving rise to filing of this appeal briefly stated are that assessee is engaged in the business of manufacture of automated teller machines (ATMs) and distribution of NCR book products and commissions in India. The assessee filed the return of income on 01.12.2003 declaring taxable income of Rs.4,66,32,670/-. The return was processed under Section 143(1) and was selected for scrutiny and notice under Section 143(2) of the Act was issued. The assessee had taken premises on lease for a period of three years. The assessee claimed expenditure of Rs.89,23,817/- on account of leasehold improvements as revenue expenditure in the computation of income. The assessing officer by an order dated 31.03.2006 inter alia held that leasehold improvements expenditure is incurred towards purchase of workstations, improvement of interiors and electrical works, fee paid to the architect, cabling work for networking of computers in connection with setting up of office. Thus, the expenditure was incurred to bring into existence an asset or an advantage for enduring benefit of business, his property is computable as capital expenditure. Accordingly, the leasehold improvement for an amount of Rs.89,23,817/- was disallowed and added back and depreciation towards furniture and fitting at the rate of 15% was allowed. The assessing officer further held that the assessee has changed the revenue recognition method and therefore it is not possible to ascertain true and correct profit of the assessee for the accounting year in question. It was further held that ATMs cannot be termed as computers and therefore are eligible for depreciation to the extent of 25%. Being aggrieved, the assessee preferred an appeal. The order was affirmed in appeal by the assessee

8. This takes us to the second substantial question of law whether ATMs are computers and are eligible for 60% depreciation. It is pertinent to note that provisions of the Karnataka Sales Tax Act, 1957 and provisions of Income Tax Act, 1961 are not pari materia provisions. The classification of goods has been provided only for the purposes of sales tax whereas, the provisions of the income tax levy tax on income. It is pertinent to mention here that Appendix 1 to Income Tax Rules, the computer has been treated as plant and machinery. Therefore, the decision relied upon by the revenue in DIEBOLD SYSTEMS PVT. LTD., supra has no application to the fact situation of the case. The tribunal by placing reliance on the decision of Bombay High Court in 'DCIT VS. DATA CRAFT INDIA LTD.,', (2010) 40 SOT 295 has held that so long as functions of the computers are performed with other functions and other functions are dependant on the functions of the computer, ATMs are to be treated as computers and are entitled to higher rate of depreciation. It has further been held that computer is integral part of ATM machine and on the basis of information processed by the computer in ATM machine only, the mechanical function of the dispensation of cash or deposit of cash is done. Therefore, it was held that ATMs are computers and are entitled to higher rate of depreciation. The aforesaid finding of fact has been recorded on correct analysis of the material available on record and by placing reliance on decision of the Bombay High Court.