M/S. HEWLETT PACKARD FINANCIAL SERVICES (INDIA) PRIVATE LIMITED,BENGALURU vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-3(1)(2),, BENGALURU

IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH: BANGALORE BEFORE SHRI PRASHANT MAHARISHI, VICE – PRESIDENT AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER ITA No. 2714/Bang/2018 Assessment Year : 2013-14

M/s. Hewlett Packard Financial Services (India) Private The Assistant Commissioner of Limited, Income Tax, No. 24, Salarpuria Arena, Circle – 3(1)(2), Vs. Hosur Main Road, Adugodi, Bengaluru. Bengaluru – 560 030. PAN: AABCC5967C APPELLANT RESPONDENT

: Sri Ketan Ved – CA Assessee by : Sri Shivanand H Kalakeri– Revenue by CIT DR

Date of Hearing : 02-04-2026 Date of Pronouncement : 15-06-2026

ORDER PER PRASHANT MAHARISHI, VICE – PRESIDENT

ITA No.2714/Bang/2018 Page 2 of 5 2. Aggrieved by the order, the assessee is in appeal before us on three issues: disallowance of depreciation on the printer at 60%, treatment of the ceased liability as income under section 41(1) of the Act, and disallowance of set-off of unabsorbed depreciation. 3. Briefly stated, the assessee, a non-banking financial company, filed its return of income on 30 November 2013 declaring nil income. The return was selected for scrutiny by issuing notice under section 143(2) of the Act. During the assessment proceedings, the Assessing Officer noted that the assessee had claimed depreciation at 60% on an asset given on finance lease, namely, the HP Indigo Digital Printer. This asset had also been examined in the assessment proceedings for assessment year 2011–12, where the assessee treated it as a computer and claimed depreciation at 60%. The Assessing Officer held that the asset was not a computer but plant and machinery eligible for depreciation at 15%. Accordingly, depreciation was restricted to 15%, and the excess claim at 60% was disallowed. 4. During the scrutiny proceedings, a notice under section 133(6) of the Act was issued to Hewlett Packard. In response, that company stated that it had written off bad debts of ₹ 8,111,417 relating to the assessee. The assessee was therefore asked to explain why the corresponding outstanding liability should not be treated as cessation of liability chargeable to tax under section 41(1) of the Act. The assessee submitted that it had not received any intimation from that company regarding the write-off claimed in response to the notice under section 133(6), and that the amount continued to be shown as payable in its balance sheet. Relying on judicial precedents, the assessee contended that merely because the creditor had written off the dues, the liability could not be treated as ceased when it remained recorded as payable in the assessee’s books. The Assessing Officer rejected this explanation, observing that the creditor had already written off the amount, while the assessee continued to show it as payable, and that both entities were group concerns. Accordingly, ₹ 8,111,417 was added as cessation of

ITA No.2714/Bang/2018 Page 3 of 5 liability. The Assessing Officer also noted that the assessee had claimed set-off of brought-forward unabsorbed depreciation of ₹ 693,437,832. Since the eligible brought-forward losses could not be verified, set-off of ₹ 333,035,126 was disallowed. 5. Accordingly, the assessment order was passed under section 143(3) of the Act on 29 March 2016, determining the assessee’s total income at ₹ 7,100,650. The order also included certain other additions and disallowances, which are not the subject matter of the present appeal. 6. The assessee filed an appeal before the learned CIT(A), who passed the appellate order on 27 April 2016. On ground No. 2, relating to the claim of depreciation at 60% on the HP Indigo Digital Printer instead of 15% allowed by the Assessing Officer, the learned CIT(A) followed the decision in the assessee’s own case for assessment year 2011–12 and confirmed the disallowance, holding that the printer was not eligible for higher depreciation. On ground No. 3, concerning the addition of ₹ 8,111,417 under section 41 of the Act, the learned CIT(A) again followed the decision for assessment year 2011–12 and upheld the addition. Similarly, on ground No. 4, relating to disallowance of set-off of unabsorbed depreciation of ₹ 333,035,126, the learned CIT(A) decided the issue against the assessee by following the decision in the assessee’s own case for assessment year 2011–12. 7. The assessee is therefore in appeal before us. The learned authorized representative submitted a chart and contended that ground No. 1, relating to disallowance of depreciation at 60% on the HP Indigo Digital Printer, is covered in the assessee’s favour by the decision in the assessee’s own case for assessment year 2011–12 in ITA No. 915/M/2017 dated 21 October 2025. 8. Regarding the treatment of cessation of liability as income under section 41 of the Act, it was submitted that this issue had already been decided in the assessee’s own case for assessment year 2011–12 in the earlier appeal and is therefore covered in favour of the assessee.

ITA No.2714/Bang/2018 Page 4 of 5 9. Regarding the disallowance of set-off of unabsorbed depreciation, he further submitted that the ITAT Mumbai had already decided this issue in the assessee’s own case for assessment year 2011–12 in ITA No. 915/M/2017 dated 21 October 2025. 10. The assessee submitted that all three issues are covered in its favour by the coordinate bench’s decision in the assessee’s own case. 11. The learned departmental representative vehemently supported the orders of the learned lower authorities. 12. We have carefully considered the rival submissions and perused the orders of the lower authorities. The first issue concerns whether depreciation of the HP Indigo Digital Printer is allowable at 60% as a computer, or only at 15% as plant and machinery. This issue has already been decided by the coordinate bench in the assessee’s own case for assessment year 2011–12 in ITA No. 915/M/2017 dated 21 October 2025. In paragraphs 3 to 8 of that order, the coordinate bench held that the HP Indigo Digital Printer is eligible for depreciation at 60%, as applicable to computers. There is no change in the facts or circumstances for the year under appeal. Since the learned CIT(A) confirmed the disallowance by relying on the order for assessment year 2011–12, which has since been reversed by the coordinate bench, there is no basis to sustain the disallowance. Respectfully following the coordinate bench’s decision in the assessee’s own case, we allow ground No. 1 and direct the Assessing Officer to treat the HP Indigo Digital Printer as a computer and allow depreciation at 60%, after adjusting the depreciation already allowed at 15%. 13. Ground No. 2 concerns the treatment of cessation of liability as income under section 41 of the Act. We find that, for assessment year 2011–12, the learned CIT(A) had confirmed a similar addition by relying on the order passed in the assessee’s own case. However, in the assessee’s appeal for that year, the ITAT Mumbai Bench, in ITA No. 915/M/2017 dated 21 October 2025, deleted the addition made by the Assessing Officer, as recorded in paragraphs 9 to 13 of that order. Since the learned

ITA No.2714/Bang/2018 Page 5 of 5 CIT(A) in the present year relied on the earlier order that has since been reversed by the coordinate bench, the issue is covered in favour of the assessee. Respectfully following the coordinate bench’s decision, we allow ground No. 2 and direct the Assessing Officer to delete the addition of ₹ 8,111,417 made as income under section 41 of the Act. 14. Ground No. 3 relates to the disallowance of set-off of unabsorbed depreciation. We find that the learned CIT(A) confirmed the disallowance by relying on the decision in the assessee’s own case for assessment year 2011–12. That order was carried before the coordinate bench in ITA No. 915/M/2017. By order dated 21 October 2025, as recorded in paragraphs 14 to 20, the coordinate bench restored the issue to the Assessing Officer and directed the assessee to submit the necessary details regarding depreciation claimed for assessment years 2001–02 to 2008–09. Respectfully following that decision, we issue the same direction for the year under appeal. Accordingly, ground No. 3 of the assessee’s appeal is allowed for statistical purposes. 15. In the result appeal of the assessee is allowed as indicated above.

Order pronounced in the open court on 15th June, 2026.

Sd/- Sd/- (SOUNDARARAJAN K.) (PRASHANT MAHARISHI) JUDICIAL MEMBER VICE-PRESIDENT Bangalore, Dated, the 15th June, 2026. Copy to: 1. Appellant 2. Respondent 3. CIT 4. DR, ITAT, Bangalore 5. CIT(A) By order

Assistant Registrar, ITAT, Bangalore