09 July 2008
UPS is not an asset falling under the category of Computer & Software. UPS is a stand by arrangement of providing power supply. An asset may be classified under the head of Computer if it is an Interactive machine giving a desired report as an output after manipulating the data fed into it as Input.As a result, UPS is an asset falling under the general category of Plant and Machinery.
10 July 2008
Let us take this healthy debate forward until it reaches to an acceptable conclusion.
I agree for the time being that UPS , being a supprotive equipment for the functioning of a machine will fall under the general category of Plant & Machinery (here in this case a computer).
Now it is necessary to know whether the machine is put to use directly or indirectly for the manufacturing of an item/product that the company is engaged in. If not the question of classifying UPS under plant and machinery does not arise at all .
The conclusion of MR. Ramesh and Mr. Srinivasaghvan may be due to the fact that AUPS produces/provide back up energy for a machine to function.I understand this is absolutely correct when we refer this to a generator or an invertor (again an invertor with no specific use in the production line has no business under plant & machinery).
It may be true, if we clasify UPS under plant and machinery only to avail depreciation beneifts for the purpose of claculating income tax, but not for the purpose of knowing the accurate details of production costs and overheads costs of a company.
12 July 2008
We have to consider the issue in purview of the relevant Acts,i.e, Income Tax Act and Companies Act. UPS is also a machine which like Generator and Inverter is similar in nature and functionality. The definition of computer has not been given in the Income Tax Act . As such its meaning is to be derived from the allied Acts. The definitions from the Information Technologies Act are given below: computer" means electronic, magnetic, optical or other high-speed date processing device or system which performs logical, arithmetic and memory functions by manipulations of electronic, magnetic or optical impulses, and includes all input, output, processing, storage, computer software or communication facilities which are connected or relates to the computer in a computer system or computer network;
"computer network" means the inter-connection of one or more computers through-
(i) the use of satellite, microwave, terrestrial lime or other communication media; and
(ii) terminals or a complex consisting of two or more interconnected computers whether or not the interconnection is continuously maintained;
"computer resources" means computer, computer system, computer network, data, computer database or software;
"computer system" means a device or collection of devices, including input and output support devices and excluding calculators which are not programmable and capable being used in conjunction with external files which contain computer programmes, electronic instructions, input data and output data that performs logic, arithmetic, data storage and retrieval, communication control and other functions From the above, it is clear that UPS is not covered in the definition of Computer or Computer System. In view of the above, it can only fall under the head of Plant and Machinery.
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