Tribunal allows depreciation on UPS, ATM machines for tech services; upholds decision on software

The Tribunal allowed 60% depreciation on UPS and ATM machines, considering them integral to the computer system in providing technology services. For software, 30% depreciation was allowed based on evidence of usage. The Tribunal's decision was upheld, dismissing the revenue's appeal.

---

---

Issues:
1) Depreciation rate on UPS
2) Depreciation rate on ATM
3) Depreciation on purchase of software

Depreciation rate on UPS:
The respondent, a subsidiary of a bank, purchased UPS, ATM machines, and software license for providing technology services. The Assessing Officer disallowed the depreciation claim on UPS and ATMs, stating they should be eligible for 15% depreciation as part of plant and machinery. The CIT (Appeals) upheld this decision. However, the Tribunal held that UPS is integral to the computer system, preventing data loss due to power fluctuations, and allowed 60% depreciation based on a Delhi High Court decision. The Tribunal also considered ATMs as part of the computer system in the banking industry, allowing 60% depreciation based on a Tribunal decision. The Tribunal accepted the evidence of software use on the required date and allowed 30% depreciation on software.

Depreciation rate on ATM:
The Tribunal's decision on the depreciation rate for ATM was based on the fact that ATMs are essential for banking operations and cannot function without computers. The Tribunal referred to a previous Tribunal decision to support the claim that ATMs are computer equipment, justifying the allowance of 60% depreciation. This decision was in line with the Tribunal's interpretation of the nature of ATMs in the banking industry.

Depreciation on purchase of software:
Regarding the depreciation claim on the software license, the Tribunal accepted evidence presented showing software use by the required date. The Tribunal concluded that the depreciation claim at 30% was valid based on the usage evidence. The Tribunal's decision was supported by the factual evidence presented, and no perversity was found in the Tribunal's findings. As a result, the appeal by the revenue was dismissed, with no costs awarded.

---