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Background: The assessee, involved in the business of import, export, and trading of computer printers and components, claimed depreciation at 60% on an Inkjet Printer costing Rs. 50,61,465/-. The Assessing Officer (A.O) allowed depreciation at 15%, treating the printer as plant and machinery instead of a computer peripheral.
A.O’s Observations: The A.O noted that the printer, described as a heavy-duty machine with significant volume, weight, and dimensions, was used for demonstrations and not for generating revenue. The A.O concluded that the printer did not qualify as a computer peripheral and allowed depreciation at 15%.
CIT(A)’s Decision: The Commissioner of Income Tax (Appeals) upheld the A.O's decision, emphasizing the printer's size and cost, arguing it could not be considered a computer peripheral. The CIT(A) dismissed the assessee's reliance on the nomenclature of the machine as a printer.
Assessee’s Argument: The assessee contended that the printer, integral to the computer system and used for business purposes, should be eligible for 60% depreciation. The assessee cited several judicial precedents, including the Hon'ble Delhi High Court's decisions in CIT Vs. BSES Yamuna Powers Ltd and CIT Vs. City Corp Maruti Finance Ltd, which allowed higher depreciation rates for computer peripherals.
Tribunal’s Findings:
- The Tribunal acknowledged the printer's use for business purposes and its dependency on a computer for functioning.
- The Tribunal referenced the Hon'ble Delhi High Court's rulings, which established that computer accessories and peripherals, such as printers, are eligible for 60% depreciation as they form an integral part of the computer system.
- The Tribunal concluded that the high cost of the printer could not be a ground to deny the higher depreciation rate.
Conclusion: The Tribunal allowed the appeal, granting the assessee the benefit of 60% depreciation on the printer, aligning with judicial precedents and recognizing the printer as a computer peripheral essential for the business.
Similar Case (A.Y. 2011-12): The Tribunal applied the same reasoning to the appeal for A.Y. 2011-12, allowing the depreciation claim at 60% for the printer, consistent with the decision for A.Y. 2009-10.
Final Order: The appeal for ITA No. 6197/DEL/2013 was partly allowed, and the appeal for ITA No. 6278/DEL/2015 was allowed, with the Tribunal pronouncing the order in the open court on 25.04.2017.
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