Computer depreciation and travel expense disallowance: iPad treated as a communication device, with restricted expense disallowance sustained.

Depreciation on an iPad was examined by reference to its real character, predominant function and common parlance meaning of "computer"; on that approach, the device was treated as a communication-oriented gadget and not a computer substitute for the higher depreciation rate under section 32. The note also addresses foreign travelling expenses, stating that where supporting vouchers were missing, a limited disallowance already sustained by the lower authorities was considered reasonable. The overall effect discussed is that the higher depreciation claim was not accepted and the restricted disallowance of travel es was maintained, leaving the assessee without relief on the substantive issues.

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Issues: (i) Whether depreciation on iPad was admissible at the higher rate applicable to computers under section 32 of the Income-tax Act, 1961; (ii) Whether the disallowance sustained out of foreign travelling expenses was justified.

Issue (i): Whether depreciation on iPad was admissible at the higher rate applicable to computers under section 32 of the Income-tax Act, 1961.

Analysis: The relevant depreciation schedule did not define computer, so the device had to be examined on its real character and common understanding. The iPad was held to be a communication-oriented device and not a substitute for a computer/laptop for depreciation purposes. The predominant function, usage, and common parlance understanding were treated as decisive, and the assessee was held not to have established entitlement to the higher rate.

Conclusion: The claim for higher depreciation on the iPad was rejected and the lower rate of depreciation was upheld, against the assessee.

Issue (ii): Whether the disallowance sustained out of foreign travelling expenses was justified.

Analysis: The lower authorities had already restricted the disallowance to a limited portion of the expenditure because supporting vouchers were missing. The restriction was found to be reasonable in the absence of complete evidence, and no interference was warranted.

Conclusion: The disallowance sustained out of foreign travelling expenses was upheld, against the assessee.

Final Conclusion: Both appeals failed and the assessee obtained no relief on the substantive issues decided.

Ratio Decidendi: Where a depreciation claim depends on whether a device falls within the expression "computer", the device must be classified by its predominant function and common parlance understanding, and the assessee must establish entitlement to the higher depreciation rate; unsupported expenditure may be disallowed to a reasonable extent.

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