PRINCIPAL COMMISSIONER OF INCOME TAX-2 vs. CONNAUGHT PLAZA RESTAURANT PVT. LTD.

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ITA/542/2016HC DelhiDLHC01166615201620 September 2016Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MS. JUSTICE DEEPA SHARMA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no substantial question of law arose for determination under Section 260A of the Income Tax Act, 1961. The Court noted that the AO had initially denied depreciation, but the CIT(A) had reversed this, allowing 60% depreciation by considering the POS terminal akin to a computer. This decision was further affirmed by the ITAT. Given this concurrent finding of fact by the lower appellate authorities, the High Court found no substantial question of law to adjudicate. The appeal was therefore dismissed.

What were the facts?

The Revenue, represented by the Principal Commissioner of Income Tax-2, appealed against an order concerning Assessment Year 2008-2009. The assessee, Connaught Plaza Restaurant Pvt. Ltd., had claimed depreciation on Point of Sale (POS) terminals. The Assessing Officer (AO) held that the POS terminals were neither computers nor computer accessories. However, the Commissioner of Income Tax (Appeals) [CIT(A)] overturned the AO's decision, allowing 60% depreciation on the equipment, considering it akin to a computer. The Income Tax Appellate Tribunal (ITAT) concurred with the CIT(A)'s finding. The Revenue's appeal to the High Court argued that a substantial question of law arose regarding the classification of POS terminals for depreciation purposes.

What were the issues?

1. Whether a Point of Sale (POS) terminal is a computer or falls within the classification of computer peripherals and accessories for the purpose of depreciation, as per Section 32 of the Income Tax Act, 1961. The Revenue contended that a substantial question of law arises on this classification. The Assessee argued that the CIT(A) had correctly held the equipment to be akin to a computer and thus eligible for depreciation, a view concurred with by the ITAT. The Revenue did not record any specific arguments beyond the framing of the substantial question of law.

Which sections of the Income-tax Act were involved?

Section 32,Section 260A

AI-generated summary — verify with the full judgment below

$~3 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 542/2016

PRINCIPAL COMMISSIONER OF INCOME TAX-2 ..... Appellant Through: Mr.Sanjay Kumar and Mr.Dileep Shivpuri, Standing Counsels

versus

CONNAUGHT PLAZA RESTAURANT PVT. LTD. ..... Respondent Through: Ms.Kavita Jha and Ms.Roopali Gupta, Advocates

CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE NAJMI WAZIRI

20.09.2016 O R D E R

The revenue’s appeal urges that a substantial question of law arises i.e. whether P.O.S. terminal, is a computer or alternatively falls within the classification of computer peripherals and accessories for the purpose of depreciation.

This court notices that for the relevant assessment year i.e. AY 2008-2009 even though the AO held that the equipment was neither computer nor it could be computer accessories, the CIT (A) overturned that decision and held that the assessee was entitled to 60% depreciation. The CIT (A) was of the opinion that the equipment was akin to a computer. That determination has been concurred to the ITAT.

Given these circumstances, this court is of the opinion that no question of law, much less a substantial one arises for determination

under Section 260A.

The appeal is therefore dismissed.

S. RAVINDRA BHAT, J

NAJMI WAZIRI, J SEPTEMBER 20, 2016 rb

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