TaxTMI 
TaxTMI 
2010 (6) TMI 458
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....ereunder for ready reference: (Amount in Rs.) Sl. No Name of the machinery Cost (Rs.) Depreciation Depreciation claimed allowed 1. Dainippon Screen 17,83,071 5,34,921 2,22,883 2. Air-Conditioner 2,00,000 60,000 25,000 3. UPS 2,05,000 61,500 25,625 4. Electronic Plate Processor 4,83,968 1,45,190 60,496 5. K Rite 510 1,55,000 46,500 19,375 Total 8,48,111 3,53,379 The reason for the AO's disallowance was that the verification of the purchase bills of the machinery revealed it to be a composite of various individual units, viz. computer software modules (costing Rs. 34.20 lakhs), air conditioners, UPS, printers, etc. Excluding computers and computer software, the other machines were stated by him to be, though computer related, in the sense that they stood to be used with the aid of computers, specialized machines for designing and printing and, as such, neither computers nor computer software. He, accordingly, worked the depreciation thereon with reference to the standard rate of 25% prescribed in respect of plant & machinery.....
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....control. The study material on the paper on information technology issued by the Institute of Chartered Accountants of India explains the term 'computer' as one which can logically be applied to any calculating machine. However, it goes on to say 'in common usage the definition of a computer has become more limited in a contemporary usage, and we now define a computer as an electronic data processing device capable of receiving input, storing sets of instructions for solving problems and generating output with high speed and accuracy. Computers are composed of switches, wires, motors, transistors and integrated circuits assembled on frames. The frames form components such as keyboards, printer, visual display units, disk drives, magnetic tape drives and central processing units. These components are wired together into a network called a computing system often called a computer.' The word "computer" is thus defined to signify an electronic machine that can store, organize and retrieve information, do complex calculations and control other machines. "Computer software" stands explained in Note # 7 to the relevant Appendix I to the Income Tax Rules, 1962 ('the Rules' hereinafter) as ....
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....rmal CTP complete with accessories. We have gone through the catalogue from DSML (HN Pg. 12); as per it, the said machine is a Thermal CPT Recorder, In other words, it processes or images plates which in turn feed the press for print output. The model - Platerite 8000 II - procured by the assessee processes (1030 x 800 mm) at 2400 dpi and can generate 13 plates per hour with sizes B-3 to B-1. The second machine, as per the relevant invoice (HN pg. 11), is an electronic plate processor falling under Excise Tariff Heading No. 8442.90. Plate processing includes the processes of developing, washing, gumming and drying. The plate processor purchased by the assessee (Model DPX 860E) is a microprocessor based system with user friendly features. The third machine is described in the relevant bill (HN pg. 10) as 'Portable Color Reflection Densitometer', Though we are unable to locate the said machine in the flow chart as detailed in the catalogue supplied by DSML, the same is apparently to monitor the density of the colours while executing colour printing jobs. The assessee states of all the said machines as computer systems which manage the entire processes. 4.6 Clearly, all the three m....
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....puter printing machine, i.e., a computer which yields print output, rejecting the Department's contention that the machine is only an improved electronic typewriter. In the case of Samiran Majumdar (supra), as well as in the case of Nestle India v. DCIT, 111 TTJ (Del.) 498, the issue was whether the printer and the scanner form an integral part of the computer system. The normal desktop computer, or any computer for that matter, would require a device for input of data (which is done through the keyboard), a programme to execute some defined operation on the same (as 'word processor'), a storage device (for storing program and data files), and finally, a mechanism for the retrieval of data. The printer attached to the computer enables the user to take the processed data (output) on paper, and which could be on any other electromagnetic media as well. As such, without doubt, a paper printer is integral to the user of the computer as such. Take the case of reservation and ticketing on computers, as (say) by the Railways or Airlines. The tickets are generated on paper, and the printed (paper) ticket delivered to the passenger. It does not take much strain to reject the argument, or ar....
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....gards the second issue, the assessee was found to have claimed labour charges in sum of Rs. 46,59,627/-, details in respect of which were sought and examined. Of it, Rs. 29,90,153/- was found to represent purchases, though included under the account 'labour charges', for the reason that at least 10% thereof was labour charges. However, being unable to furnish the precise figure of the labour charges included therein, the AO estimated the labour component at Rs. 3,50,000/-, and having been paid without deduction of tax at source, disallowed the same by invoking the provision of section 40(a)(ia) of the Act. Another sum of Rs. 12,57,078/- was in respect of printing materials and binding charges, including, admittedly, labour charges in the sum of Rs.7,54.247/-, which stood paid without deduction of tax at source, so that disallowance u/s. 40(a)(ia) was effected. The assessee did not contest the second disallowance, i.e., for Rs. 7.54 lakhs before the ld. CIT(A) (refer pg. 2 of his Order) As regards the first, though challenged, was of no avail, as the ld. CIT(A) found the estimation by the AO at Rs. 3.5 lakhs as reasonable, considering the admission by the assessee of at least 10% of....