TaxTMI 
TaxTMI 
TaxTMI 
2022 (8) TMI 1414
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....ns of the Act and of book profit Rs.. 3,09,79,643/- under section 115JB of the Income Tax Act, 1961 ["Act" in short]. The assessment has been completed under section 143(3) of the Act dated 30.11.2019 and determining total assessed income of Rs..27,98,691/- under normal provisions and book profit of Rs.. 3,09,79,643/- under section 115JB of the Act. On appeal, the ld. CIT(A) dismissed the appeal filed by the assessee and sustained the addition made by the Assessing Officer towards disallowance against depreciation on ATM machines and addition of cessation of liability under section 41(1) of the Act. 4. Aggrieved, the assessee is in appeal before the Tribunal. 5. The first issue came up for consideration in ground Nos. 3 to 7 relates to disallowance of depreciation on Automated Teller Machine [ATM]. The ld. Counsel for the assessee, at the time of hearing, submitted that this issue is squarely covered in favour of the assessee by the decision of the ITAT, Chennai in assessee's own case for the assessment years 2013-14 onwards, where, the Tribunal has held that the ATM machines are eligible for depreciation at 60% as applicable to computer software. 6. On the other hand, the ld. D....
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.... vs DDIT (International Taxation) reported in (2017) 88 taxmann.com 330 (Kolkata - Trib.) dated 13.4.2016 (wherein one of us was the author) had held that :- 8.2 We have heard the rival submissions. We find that the ATM machines are nothing but computers as they deal with the functions of decoding the information, processing the same and giving the output. The Learned AR submitted that ATM is a computer terminal activated by a magnetically encoded debit card that allows a person to make deposits to and withdrawals from his account pay bills, transfers money between his account at any time. The inbuilt computer software therein allows the person to make financial transactions and check the account balances. It was the submission of the Learned AR that inside every ATM there is a computer which is not very different from any other personal computer but the basic function of connecting a person to the bank ATM network and accessing his account information are done by the ATM and the software used in the ATM is also the same software which is used in the computer. We also find that similar issue has been addressed by the Special Bench of Mumbai Tribunal in the case of Dy. CIT v. Data....
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....ATM would undoubtedly form a part of computer. 11. In the light of the view we have taken above, we direct the AO to allow depreciation at the rate of 60% on LAN, WAN and ATM equipments. We order accordingly. 8.2.2 ......... 8.2.3 In respect of the case relied on by the Learned DR on the decision rendered by this tribunal in assessee's own case for Asst Year 2004-05, we find that this decision was rendered on 30.6.2010 and thereafter much water has flown on the impugned issue by the decisions of Delhi and Mumbai Tribunal and the decision of Bombay High Court. Respectfully following the aforesaid judicial precedents, we have no hesitation in directing the Learned AO to allow depreciation at the rate of 60% on ATMs. Accordingly, the ground no. 5 raised by the assessee for the Asst Years 2005-06 and 2006-07 are allowed. 6.2. We also find that the decision relied upon by the ld DR on Hon'ble Karnataka High Court supra was rendered in the context of Karnataka Sales Tax Act and not under Income Tax Act. In this regard, we find that the Hon'ble Supreme Court in the case of Jagatram Ahuja vs CIT reported in 246 ITR 609 (SC) had observed as under:- 23. We find that Kantilal T....
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.... previous year to the assessment year 2008-09. Consequently the excess claim of depreciation made by the respondent assessee was disallowed. 4) In appeal the CIT(Appeals) upheld the findings of the Assessing Officer. 5) In second appeal, the Tribunal by its order dated 14/3/2012 held that UPS is an integral part of the computer system and regulate the flow of the power to avoid any kind of damage to the computer network due to fluctuation in power supply which could lead to loss of valuable data. The Tribunal relied upon the decision of the Delhi High Court dated 20/1/2011 in the matter of CIT v. Orient Ceramics and Industries Ltd in which UPS was held to be the part of the computer system and depreciation at 60% was allowed. Similarly, so far as ATMs are concerned, the Tribunal on finding of fact concluded that ATM cannot function without the help of computer and would be a part of the computer used in the banking industry. Reliance was placed by the Tribunal upon the decision of the Delhi Bench of Tribunal in the matter of DCIT v. Global Trust Bank (ITA No. 474/D/09) wherein it has been held that ATM was a computer equipment and depreciation @ 60% was allowed. So far as the u....
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.... Taxman 459 (SC]. The Hon'ble Supreme Court of India in the case of Jagatram Ahuja (supra) while laying down the said principle clarified that aims and object of the two legislations, namely, the Gift Tax Act and the Estate Duty Act, are not similar. The Karnataka Sales Tax Act and the Income-tax Act, 1961 are not similar, i.e., pari materia legislations. In the matter of interpretation of an entry under the sales tax laws 'Trade Test' or 'Common Parlance Test' is applied while considering whether a particular item/goods fall in an entry or not, whereas under the Income-tax Act, 1961, particularly when considering whether an item is to be considered as 'plant and machinery' and/or 'building' or any of the items specified in the Appendix to the Income-tax Rules, 1962, functional test is the decisive test, as ruled by the Hon'ble Supreme Court of India in numerous cases, one such being CIT vs. Anand Theatres (2000) 244 ITR 192/110 Taxman 338. In other words, the test would be: Does an ATM fulfil the functions of a Computer in the business activity of an assessee? Is it a tool of his trade with which it carries on his business? If the answer is in affirmative, it would be a computer a....