Computer system depreciation principle treats LAN, WAN and ATM equipment as integral hardware eligible for higher depreciation.

LAN, WAN and ATM equipment are treated as part of a computer system where they cannot function independently and operate only through linkage with the computer and main server. On that basis, such equipment is regarded as integral computer hardware rather than separate assets for depreciation purposes, supporting the higher depreciation rate of 60%. The stated result is that the Revenue's challenge failed and the assessee's claim to depreciation at the enhanced rate on the disputed equipment was confirmed.

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Issues: Whether LAN, WAN and ATM equipment form part of the computer system so as to qualify for depreciation at the higher rate of 60%.

Analysis: The equipment in question was held to be incapable of independent use without the computer and main server. LAN and WAN were treated as computer network components and ATM machines were viewed as computerized devices operating only through linkage with the computer system. On that basis, they were regarded as integral parts of the computer hardware and not as separate assets for depreciation purposes.

Conclusion: The depreciation on LAN, WAN and ATM equipment was correctly allowable at 60%, and the Revenue's challenge failed.

Final Conclusion: The appeal was rejected and the assessee's entitlement to higher-rate depreciation on the disputed equipment stood confirmed.

Ratio Decidendi: Equipment that functions only as an integral component of a computer system and cannot operate independently is to be treated as part of the computer for depreciation purposes.

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