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Depreciation rate on ups and printer

CA J.Alamelu lakshmi (Chartered Accountant) (857 Points)

04 July 2013

What is the rate of Depreciation rate on UPS and Printers as per Income Tax Act?

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11 Replies

SAGAR (ARTICLED ASSISTANCE) (236 Points)
Replied 04 July 2013

Hai,

I too have the same problem, if u get the exact/correct answer please share with me.

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UPS and printer form a part of computers.. So 40% should be ideal... Correct me if i m wrong

CA Aman Gupta (Chartered Accountant) (344 Points)
Replied 04 July 2013

Printers & UPS are eligible for 60% depreciation rate. Reference can be drawn towards various judicial pronouncements

ITO vs Simran Majumdar (2006) 101 TTJ 501 (Kol.)

Nestle India vs DCIT (Delhi ITAT)

however it is pertinent to note that recently Mumbai ITAT in Godfrey Phillips India Ltd. v. Addl. CIT(2013) ITA No. 7682/Mum/2010 has held that ss UPS being energy saving device, the same is entitled for higher depreciation @ 80 percent.

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CA Aman Gupta (Chartered Accountant) (344 Points)
Replied 04 July 2013

@ Aanya - You are right that these are part of computer system. However please note that according to Income Tax Rules, 1962 computers are eligible for Depreciation @ 60% instead of 40%

SAGAR (ARTICLED ASSISTANCE) (236 Points)
Replied 04 July 2013

Dear Aman,

Shall we claim 80% depreciation on UPS used in audit firms???

Please explain how was a UPS can be catogorised as energy saving device.

As per me its is only keep backup of electricity which can be used when necessary.

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CA Aman Gupta (Chartered Accountant) (344 Points)
Replied 04 July 2013

Yes of course it can be claimed in Audit Firm. Further, please note that its the single judgment stating that Dep @ 80% can be claimed on UPS. I am reproducing the relevant extract of the decision for your reference.

13. We have heard the rival contentions. Short question is whether UPS is a `Automatic Voltage Controller’ falling within the heading of energy saving device in the Appendix to the Income-tax Rules, 1962 giving depreciation rates. Legislature in its wisdom has chosen to show an Automatic Voltage Controller as an electrical equipment eligible for 100% depreciation, falling under the broader head of energy saving devices. Once Legislature deemed that an `Automatic Voltage Controller’ is a specie falling within energy saving device, it is not for the Assessing Officer or Ld CIT(A) to further analyse whether such an item would (sic was) indeed be an energy saving device. In fact it is beyond their powers. Hence the only question to answer, in our opinion is whether an UPS is an `Automatic Voltage Controller’. It is mentioned in the product brochure (Paper Book Page 64) that the UPS automatically corrected low and high voltage conditions and stepped up low voltage to safe output levels. Thus in our opinion, there cannot be a quarrel that UPS was doing the job of voltage controlling automatically. Even when it was supplying electricity at the time of power voltage, the voltages remained controlled. Therefore in our opinion, a UPS would definitely fall under the head of `Automatic Voltage Controller’. We are fortified in taking this view by the decision of Jodhpur Bench in the case of Surface Finishing Equipment . As for the decision of the Delhi Bench in the case of Nestle India referred by the Ld. DR, there the question was whether UPS could be considered as `computer’ for depreciation rate of 60%. There was no issue or question, whether it could be considered as an Automatic Voltage Controller and hence in our opinion that case would not help the Revenue here. Therefore, we are of the opinion that the assessee was eligible for claiming 100% depreciation on UPS. Disallowance of Rs. 6,82,443 therefore stands deleted.” Following the above mentioned decision, the Tribunal decided the issue in favour of the assessee. This ground was decided in favour of the assessee.

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Amrita vyas (chartered accountant) (2600 Points)
Replied 04 July 2013

If ups n printers are part of Computers den rate will b 60%

Agreed with CA Aman Gupta

Aditya (CA) (37 Points)
Replied 05 July 2013

Hi,

As per previous judgements, both could have included in computers and chargebale @ 60%, since the same were inoperable without computers; however with new technology the same are now independant units ans are not dependat on computer for their operations.

Therefore, they will be chargeable @ 15% for P&M.