2016 (1) TMI 1127

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....owever the cruxes of the issues are that:- (i) The Ld. CIT(A) has erred in sustaining the addition of Rs. 1,80,229/- being the disallowance of the claim of depreciation at 80% and the grant of depreciation at 15% by the Revenue, since these equipments cannot be classified in any of the items mentioned in the depreciation table New Appendix-I-III-(8)(ix) of the Income Tax Rules. (ii) The Ld. CIT(A) has erred in sustaining the addition of Rs. 17,13,508/- & Rs. 9,01,181/- being the disallowance of the claim of depreciation at 60% and the grant of depreciation at 15% by the Revenue since these items cannot be considered as "Computers" falling in Appendix-I - III (5) of the Income Tax Rules.   3. The brief facts of the case are that the ....

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....ove is disallowed and added to the total income. 4.2 ---- 4.5. The definition of a transformer as per Wikepedia is as under:- A transformer is an electrical device that transfers energy between two or more circuits through electromagnetic induction 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 ....

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....on on computers and computer peripherals. The assessee had 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) of the Income Tax Rules which are eligible for depreciation @ 60%. However, the Ld. Assessing Officer allowed depreciation @ 15% as provided under New Appendix-I-(III)(1) of the Income Tax Rules. 5.2 On appeal, the Ld. CIT (A) allowed depreciation @60% in regard to Scanner, Sisco Router, Modem and allowed depreciation for rest of the items @ 15%....

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.... the applicable customs duty with the following description. "Register TY-800 AOL Vision plate punching and bending system and has 3 components: a) One TY-800 AOL Auto Vision Punching and Bending; b) One Standard Conveyor; C) One plate stacker. 5.8 Name of asset in the invoice as "Register TY-800 AOL Vision plate punching and bending system". Assessee classified this machine with the description CTP machine. It is surprising how Appellant has modified the name of the Asset. 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 Appellant questioned stated that it is based on the function it performs. 5.9 ....

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.... 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 computer is dedicated to that machine and does only the functions for that machine. This in my view does not make machines as computers to be eligible for claiming the depreciation at 60%.   5.11 The gist of the decisions relied by the Appellant are as under: - - - - - 5.12 The decisions relied by the Appellant only cover assets like laptops, servers, printers, scanner, sisco router, modem, laptop mouse, Projector, Pendrive, Network equipment, router pack desktop with monitor. IBM San Switches which are integ....