TaxTMI 
TaxTMI 
2018 (4) TMI 143
X X X X Extracts X X X X
X X X X Extracts X X X X
.... returned income and disallowing the higher rate of depreciation and deductions claimed which is contrary to facts of the ease, contrary to the evidence on record and unsustainable in law. 2. The Learned Commissioner erred in not allowing the higher rate depreciation claimed on Cash Dispenser, ATM and its related accessories and UPS batteries. 3. The Learned Commissioner erred in not considering the grounds of appeal relating to claim for higher rate of depreciation claimed on printer and scanner and failed to give any finding on the same. 4. The Learned Commissioner erred in confirming the addition of Rs. 43,70,680/- being the interest not received on Non-Performing assets (NPAs) and ought to have held that such intere....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e, being a non-scheduled cooperative bank, he held that the interest on NPAs is to be offered to tax on accrual basis. Accordingly, he made the addition and brought it to tax. Aggrieved, the assessee preferred an appeal before the CIT (A), who confirmed the order of the AO and the assessee is in second appeal before us. 4. The learned Counsel for the assessee submitted that the ATM & ATM related accessories, including cash dispensing machine, cannot be operated without the computer and therefore, they are to be considered as part of the computer and they are eligible for depreciation @ 60%. Similarly, he also submitted that the UPS is necessary for running of the ATM and ATM related accessories and therefore, they should be considered as p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....herals such as routers and switches can be classified as computer hardware, when they are used along with a computer and it was held that when their functions are integrated with a 'computer' and when a device is used as part of the computer in its functions, then it would be termed as a computer. 8. The Coordinate Bench of the Tribunal in the case of Saraswat Infotech Ltd (Supra) has followed the decision of the Hon'ble Bombay High Court in the assessee's own case to hold that depreciation @ 60% is allowable on UPS. 9. In the case of Global Trust Bank Ltd (Supra), Coordinate Bench of the Tribunal at Delhi has held that the ATM is a computer telecommunication device that allows Bank Customers to access banking at places other than the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rned Counsel for the assessee submitted that this issue is fairly covered in assessee's favour by the decision of the Hon'ble Gujarat High Court in the case of Pr. CIT vs. Shri Mahila Sewa Sahakari Bank Ltd reported in (2017) 395 ITR 324 (Guj.) and in the case of Kranthi Cooperative Urban Bank Ltd vs. ACIT in ITA No.1194/Hyd/2016 dated 20.12.2016. 12. The learned DR, however, supported the orders of the authorities below. 13. Having regard to the rival contentions and the material on record, we find that the Hon'ble Gujarat High Court and also the Hon'ble Bombay High Court has considered the decision of the Apex Court in the case of Southern Technologies Ltd to hold that the interest on non-performing assets/sticky loan ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ncome has to be recognised in terms of prudential norms by applying the real income theory. 6. The revenue contended, in the aforecited decision, that Sec. 43D of made, the assessee cannot indirectly claim benefit. On this aspect, the court observed that the benefit was claimed by the assessee not under any provisions of the IT Act, but, on account of the fact that it is bound by the RBI Guidelines, which are issued under the provisions of the RBI Act whereby the interest on NPAs cannot be shown as income. The provisions of sec. 45q of the RBI act would have an overriding effect over the other laws, including the Income Tax Act. Therefore, notwithstanding the provisions of Sec. 43D of the Act, the A.O. is bound to follow the RBI Guidelin....