ITAT Mumbai: UPS and ATM Depreciation Rates Upheld

The ITAT Mumbai bench allowed higher depreciation on UPS and ATM machines, following decisions from the Delhi High Court and Delhi ITAT, respectively. The appellant successfully argued that UPS and ATMs should be eligible for higher depreciation rates due to their integral roles in computer systems. Additionally, the ITAT ruled in favor of the appellant regarding the depreciation on the purchase of software licenses, acknowledging evidence presented to prove acquisition and use within the specified timeframe.

---

---

Issues:
Depreciation on UPS, Depreciation on ATM machines, Depreciation on purchase of software license

Depreciation on UPS:
The appeal involved the disallowance of excess depreciation claimed on UPS and ATM machines by the Assessing Officer (AO). The AO held that UPS and ATM machines were eligible for depreciation at 15% as part of plant and machinery/office equipment, instead of the claimed 60%. The CIT(A) upheld the AO's findings, leading to the appeal. The appellant argued that UPS is integral to computer systems, regulating power flow to prevent data loss. Citing a decision of the Hon'ble Delhi High Court, the appellant contended that UPS should be considered for higher depreciation. The ITAT Mumbai bench, following the Delhi High Court's decision, allowed higher depreciation on UPS.

Depreciation on ATM machines:
The issue of depreciation on ATM machines was also contested. The revenue authorities considered ATMs as mere cash dispensers and projectors, not computer peripherals. The appellant provided evidence showing the computer-dependent functions of ATMs and referenced a Delhi ITAT decision supporting depreciation at 60%. The ITAT Mumbai bench, in line with the Delhi ITAT decision, allowed higher depreciation on ATM machines, emphasizing the importance of computer peripherals in the banking industry.

Depreciation on purchase of software license:
Regarding the depreciation on the purchase of software licenses, the revenue authorities disallowed depreciation as the appellant allegedly failed to prove installation and use by a specific date. The appellant presented evidence demonstrating the acquisition and use of software licenses by the deadline. The ITAT Mumbai bench acknowledged the proof provided by the appellant, allowing depreciation at 30% and ruling in favor of the appellant.

---