2014 (3) TMI 540

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....wance of extra deprecation claimed on video conferencing equipments ignoring the fact that as per depreciation rates mentioned in Appendix 1 (Rule 5) of the I.T. Rules, only computer and computer software will be entitled for depreciation @ 60% and the same cannot be extended to the other equipments where computer is used. 3. In this case AO noted that the assessee has claimed depreciation @60% of video conferencing equipments which included the following components. 3.1 From the above, AO noted that the above items are mainly plasma TV and other TV sets which can work even without computer. AO was of the opinion that the process of video conferencing may involve the help of computer system, but it cannot be termed as part and parcel ....

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....the market staff and customers of the appellant company for the purposes of exchanging the technical knowledge. A computer is defined as per section 2(1)(t) of the Information Technology Act 2000 as follows:- "The expression "computer" has not been defined in the Act. However, it has been defined by section 2(1)(t) of the Information Technology Act, 2000. As per the said Act, "computer" means any electronic, magnet, optical or other high speed data processing device or system which performs logical, arithmetic and memory functions by manipulation of electronics or magnetic or optical impulses and includes all input - output processing, storage, computer, software or communication facilities which are connected or related to the comput....

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....ard, I am also of the opinion that it is the use of an asset which is the paramount and significant for the purpose of deciding the allowance of rate of depreciation. Therefore, in my considered opinion a video conferences system is also a computer device which is eligible for depreciation @60%as per the provisions of the I T Act. Therefore, the AO is directed to allow depreciation on the Video Conference System at the rate of 60%." 5. Against the above order the Revenue is in appeal before us. 6. We have heard both the counsel and perused the records. 6.1 In our considered opinion the process of video conferencing may involve the help of computer system, but the entire video conferencing system cannot be the termed as part and par....

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....in the list of the video conferencing equipments as mentioned in the AO's order reproduced hereinabove, the TV sets cannot be allowed depreciation as above. Hence, we modify the order of the Ld. CIT(A) as above and direct the AO to allow depreciation @ 60% on other items mentioned in the list except TV sets. The other items mentioned in the list except TV sets, in our considered opinion, can be considered a part of the computer system and hence they will be allowed depreciation @ 60%. However, the TV sets used cannot be allowed depreciation @ 60%, as applicable to computers. 7. In the result, the Appeal filed by the Revenue stands partly allowed. Order pronounced in the Open Court on 14/3/2014. ============= Document 1 S.No. ....