TaxTMI 
TaxTMI 
2016 (9) TMI 506
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....elveli, issued a notice, under Section 143(2), on 08.08.2013. Subsequently, after transfer of the case, another notice under Section 142(1) has been issued on 18.11.2013. In response to the same, the assessee s authorized representative Shri.A.Muthu, Internal Auditor appeared and produced books of accounts, copy of bank statements and other details. After examination of the details and discussion with him, the assessment is completed making the following additions, (a) Disallowance of excess Depreciation Rs. 1,80,229/-. (b) Disallowance of excess Depreciation Rs. 17,13,508/- and Rs. 9,01,181/-. (c) Disallowance of Additional depreciation Rs. 19,96,405/-. 3. As regards the claim of depreciation on electrical equipments, the assessee had claimed 80% depreciation against the "control panel board and transformer , treating them to be electrical equipments, classified under the head "B". Instrumentation and monetary systems for monitoring energy flows in the depreciation table New Appendix-I-III-(8)(ix)B, which works to Rs. 1,80,229/-. The assessing officer was of the view that the above items do not qualify for depreciation at 80%, as these equipments are ....
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....and are designed to efficiently change AC voltages from one volte level to another increase or decrease. 4.6. Appellant is arguing that depreciation of 80% is allowable under the Act for Automatic Electrical Load monitoring systems and Automatic Voltage controller, power factor controller for AC Motor and that Transformer and Control Panel Board represent Automatic Electrical Load monitoring system and Automatic Voltage controller. A transformer is used to step up or step down the voltage and is not same as Automatic electrical Load monitoring systems and Automatic Voltage controller, power factor controller for AC Motor. Therefore the decision of the Assessing Officer to restrict the depreciation is in order and the addition is upheld." 6. As regards the claim of depreciation on computers and computer peripherals, the assessee claimed depreciation on the following items, viz., cannon lide, scanner, computerized counting & stacking machines, transportation charges, CTP machine, scanner, sisco router, modem, computerized counting & stacking (F/C), CTP machine (clearing charges), CTP machine(erection) treating it as Computers as mentioned in New Appendix-I III (5) o....
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....e case of DCIT vs Data Craft India Ltd in I.T.A. Nos 7462 & 754/Mum/2007, the Mumbai Special Bench held that routers and switches are to be included in the block of computers entitled of 60% Depreciation. From the above decisions, it is clear and evident that the computers, computer accessories and peripherals such as printers, scanners, servers Router, Modem and computerized Machineries and plants are form part of computer and hence they are eligible 60% Depreciation." 9. While considering the explanation, "Computerized Counting & Stacking Machine and the CTP Machine", the Commissioner of Income-Tax (Appeals)-II, Madurai, vide order in I.T.A.No.12/2014-15, dated 21.10.2014, upheld the findings of the assessing officer, as hereunder: "5.5 Surprisingly, the name of the machine in the invoice is Logic stacker with strapper . Assessee classified this machine with the description computer counter and stacker. It is surprising how Appellant has modified the name of the machine. Normally the name of the machine in the accounts should always be what is indicated in the invoice and in: my view Appellant has no choice of writing the description as it wishes. When questioned, App....
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....the as a computer. It still does machining, cutting metal and creating shapes in the metal but it is more automated and driven by preprogrammed instructions through the computer. it is still a machine assisted by a computer and microprocessor. 5.9 As per the schedule of depreciation, the rate 60% .of depreciation is allowable only to computers and at best may include accessories like servers, scanner sisco router modem etc as held in the decisions cited by the Appellant but can never include the 2 machines acquired by the assessee. The description of the machines as per the invoice is different and Appellant s decision to use its own names adding the word computer is incorrect. Assessee cannot invent its own nomenclature add the word computer which is not there in invoice and then proceed to claim depreciation at 60% with the argument that they are computers. 5.10 Even on functionality test, these machines represents plant and machine which helps in easier typesetting and faster printing of the newspaper and automated stacking of newspaper in correct numbers. The machines do contain computer as one part of the whole machinery, but it should be noted that the compu....
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....d therefore, they are entitled to depreciation @ 80%, as provided under the Act. Considering the arguments of the appellant-assessee and the findings of the authorities, the Income Tax Appellate Tribunal, vide order, dated 14.01.2016, in I.T.A.No.2829/Mds/2013, held as follows: "We find merit in the contention of the Ld. A.R. Control panel board and Transformers are more or less items either falling in the category of Instrumentation and monitoring systems as stated in the depreciation schedule in New Appendix-IIII-(8)(ix)B of Income Tax Rules or Electrical equipment as stated in the New Appendix-I-III-(8)(ix)E under the head Electrical Equipments taking into account of the principles of ejusdem generis. Therefore we hereby direct the Ld. Assessing Officer to grant depreciation @ 80% to the assessee on these above stated items." 12. On the claim of depreciation on computers and computer peripherals, the Tribunal further held, as follows: "We agree with the view of the Ld. CIT (A). Only computer peripherals can be at the most considered as computers for the purpose of claiming depreciation at the rate prescribed in New Appendix-III(5) of the Income Tax Rules. Al....