Appeal admitted after delay due to lockdown, stay application dismissed, favorable ruling on biometric devices depreciation.

The delay in filing the appeal was condoned due to lockdown and pandemic reasons, leading to the admission of the appeal. The stay application by the appellant was dismissed as infructuous. Regarding the depreciation rate on biometric devices, the Tribunal ruled in favor of the appellant, determining that biometric systems qualify as computers and are eligible for higher depreciation rates. The orders of the CIT(A) were set aside, and the appeal of the assessee was allowed.

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Issues:
1. Condonation of delay in filing appeal.
2. Depreciation rate on biometric devices.

Condonation of Delay:
The appellant filed an appeal with a delay of 195 days citing lockdown and pandemic as reasons. The delay was condoned after considering the circumstances, and the appeal was admitted. Consequently, the stay application by the appellant was deemed infructuous and dismissed.

Depreciation Rate on Biometric Devices:
The primary issue revolved around the depreciation rate applied to biometric devices purchased by the assessee. The Assessing Officer (AO) restricted the depreciation to 15% instead of the claimed 60%, as the AO considered biometric devices capable of functioning independently without attachment to a computer. The AO rejected the contention that biometric devices should be treated as part of a computer, based on ITAT Mumbai's decision in a similar case.

The CIT(A) upheld the AO's decision, emphasizing that biometric devices could operate independently without computers. However, the appellant argued that biometric devices needed to be connected to a computer for functionality and output.

The Tribunal analyzed the detailed usage of biometric devices for Aadhar enrollment and other schemes, highlighting the necessity of computer attachment for output. Referring to precedents, the Tribunal noted the Madras High Court's decision on computer printers and the Mumbai Special Bench's ruling on computer systems. Applying these precedents, the Tribunal concluded that biometric devices, when used with a computer and integral to its functions, could be considered as part of a computer.

Ultimately, the Tribunal ruled in favor of the appellant, determining that biometric systems qualified as computers and thus should be eligible for higher depreciation rates. Consequently, the orders of the CIT(A) were set aside, and the appeal of the assessee was allowed.

In conclusion, the Tribunal dismissed the stay application and allowed the appeal of the assessee, pronouncing the order on 6th January 2021.

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