TaxTMI 
TaxTMI 
2007 (4) TMI 389
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.... the computers. 2. We have heard the rival submissions and carefully perused the orders of the authorities below and documents placed on record. 3. The facts in brief are that the assessee has claimed depreciation @ 60 per cent on computers and routers. The Assessing Officer has restricted the depreciation @ 25 per cent on routers having held that these are not computers. The Assessing Officer has examined the difference between the computers and routers, before holding that function of routers is only of communication of the data and is not a part of the computer system. The relevant observation of the Assessing Officer at page Nos. 2 to 4 are extracted hereunder for the sake of reference : "In common parlance, the term 'computer'....
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....computers a routers is the device which links or connect such computers for exchange of relevant data. In other words, a routers is an electronic device is switched between computers for connectivity. It is a main link which decides and facilities connectivity between computers in a network which could be a lan or wan. Routers are switches, doing the job of multiplexing. These are basically complex electronic circuits managing the links between various computers. It is not necessarily a stand alone system as commonly understood vis-a-vis a computer. In other words, it has to be dependent for its functioning in the computer. It can also be a dedicated device performing the lone function of establishing links. Distinction between a compute....
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....contained in Industrial (Development) Regulation Act, 1951 and 'Company' as per section 25 of the Companies Act, 1956 whereas the definition of 'Computers' has not been given anywhere in the Income-tax Act. Thus, this equipment does not even qualify as 'computer system' as per the definition given in Explanation (a) below section 36(1)( ix) of the Income-tax Act. Since the function of routers is limited only to communication of the data. It is, therefore, held that the routers are entitled for depreciation @ 25 per cent under the block of assets, i.e., plant and machinery and not @ 60 per cent allowed to computers as per Appendix (I) to Income-tax Rules. The details of depreciation allowable according to the date of acquisition of rou....
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....been defined under the Income-tax Act and in these circumstances, the computer is to be understood in the light of the definition given in the Cyber Law and Information Technology Act, 2000. According to it, computer means any electronic, magnetic, optical or other high speed data processing device or system which performs logical, arithmetical and memory functions by manipulations of electronic, magnetic or optical impulses and includes an input, output, processing, storage, computer software or communication facilities which are connected or related to the computer in a computer system or computer network. Since the routers is an essential part to connect the two computers and transmit datas from one computer to other, it can only be call....
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.... submissions and from careful perusal of the Orders of the lower authorities, we find that Assessing Officer has examined the difference between the computer and routers and according to him, router is a tele-communication device. It is an electronic circuitry, facilitating switching between different computers in a net working environment. Thus, if any information is to be sent or retrieved through several network of computers, a router is the device which links or connects such computers for exchange of relevant data. In other words, a router is an electronic device switched between computers for connectivity. It is a main link which facilitates connectivity between computers in a network which could be lan or wan. We have also examined t....
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....puter network. The computer network is also defined under this Act and according to it, a computer network means, the inter-connection of one or more computers through the use of satellite, microwave terrestrial line or other communication media. Undisputedly, a router is used to provide a connectivity between the computers and also to process the data from one computer to another. A router of its own does not perform logical, arithmetical or memory functions by manipulations of electronic, magnetic or optic impulses. Without a router, a computer can independently work and perform all functions. 8. Before us, the learned counsel for the assessee did not filed complete text of computer network. He has tried to draw an inference from the d....