Depreciation on independent electronic equipment treated as plant and machinery, not computer peripherals, under the tax schedule

LED wall, projector and related accessories used with a computer or laptop were not treated as computer equipment eligible for 60% depreciation because they were independent electronic devices, not shown to be integral parts of the computer system. Operating an item through software or with a laptop did not by itself make it a computer accessory or peripheral. The higher depreciation claim was rejected, and depreciation at 15% as plant and machinery was sustained.

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Issues: Whether LED wall, projector and accessories used with computer or laptop were entitled to depreciation at 60% as computer equipment, or only at 15% as plant and machinery under the depreciation schedule.

Analysis: The depreciation rates under Appendix I to the Income-tax Rules, 1962 prescribe higher depreciation for computers and computer peripherals, while other plant and machinery attract lower rates. The LED wall, projector and accessories were found to be independent electronic equipment which may operate with or without computer support and were not shown to be an integral part of the computer system. The fact that an item is operated through software or with a laptop does not by itself make it a computer accessory or peripheral entitled to the higher rate.

Conclusion: The claim for depreciation at 60% was rejected and depreciation at 15% was sustained.

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