16 July 2009
Whether the printers and other peripherals attached to a computer are part of computers, hence the deprecation has to be charged at the rate of 60% on such peripherals. This matter come up for the consideration before the ITAT Kolkata in the case of ITO vs. Samiran Majumdar 280 ITR (At) 74 (Kolkata) and ITAT New Delhi in the case of ACIT vs Continental Carriers (P) Ltd.ITA No. 2137/Del/2008. In the case of ITO vs. Samiran Majumdar 280 ITR (At) 74 the ITAT Kolkata Observed that the term "computer" has not been defined under the Act. However, the computer system has been defined under Explanation (a) to clause (xi) of section 36(1) of the Income-tax Act to mean a device or collection of devices including input and output support devices and excluding calculators which are not programmable and capable of being used in conjunction with external files, or more of which contain computer programmes, electronic instructions, input data and output data, that performs functions including, but not limited to, logic, arithmetic, data storage and retrieval, communication and control." Based upon the above observation while applying the ratio decision of a Full Bench of the Hon'ble Supreme Court in the case of CIT v. Karnataka Power Corporation [2001] 247 ITR 268 decided as following – “In view of the above facts and following the ratio of the decisions including the decision of the hon'ble Supreme Court in the case of Karnataka Power Corporation [2001] 247 ITR 268, we are of the view that the printer and scanner are an integral part of the computer system, therefore, they are to be treated as computer for the purposes of allowing higher rate of depreciation, i.e., 60 per cent., and, accordingly, we decline to interfere in the order passed by the learned Commissioner of Income-tax (Appeals) on this account. The grounds taken by the Revenue are, therefore, rejected”. In the case before ITAT following question was raised before the Hon’ble Delhi ITAT on an appeal filed by revenue for AY 2005-06 “2. In the facts and circumstances of the case, the Ld. CIT (A) erred in allowing the depreciation @ 60% on computer peripherals against the admissible rate of 25% and thereby deleting the addition of Rs.75,790/- made by A.O.” While, deciding the matter in favour of the assessee the Hon’ble Delhi ITAT followed the decision of the Kolkata ITAT in the case of ITO vs. Samiran Majumdar 280 ITR (At) 74 (Kolkata) and observed as following - “5. As regards second ground, we find that the matter stands covered in favour of the assessee by the decision of the Tribunal in the case of ITO vs. Samiran Majumdar 280 ITR (At) 74 (Kolkata) wherein the Tribunal held that the term "computer" has not been defined under the Act, yet Explanation (a) to clause (xi) of section 36(1) of the Income-tax Act, 1961, defined the term "computer system". Further, the Institute of Chartered Accountants of India in its study material defined the term "computer" as an electronic data processing device capable of receiving input, storing sets of instructions for solving problems and generating output with high speed and accuracy; that the printer and scanner could not be used without the computer, that is, they were part of the computer system. Thus, the printer and scanner were an integral part of the computer system and they are to be treated as computer for the purpose of allowing higher rate of depreciation. We accordingly uphold the order of the CIT (Appeals) in granting higher deprecation @ 60% on computer peripherals as against 25% allowed by the Assessing Officer.” Thus the matter stand settled and the rate of deprecation allowable to printers and other computer pheripherals is 60% as per the decision of ITAT Kolkata and New Delhi.
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