SMT. MAMTA NIRAJKUMAR AGRAWAL,,VADODARA vs. THE INCOME TAX OFFICER, WARD-3(1)(3),, VADODARA

ITA Nos. 811/Ahd/2017 & 376/Ahd/2017 are two separate appeals by the Assessee preferred against two separate orders of the Ld. CIT(A)-3, Vadodara

The underlying facts in issues are identical in both the years, therefore both these appeals are taken together and disposed of by this common order for the sake of convenience and brevity. Representatives of both sides agreed that facts of A.Y. 2012-13 in ITA No. 376/Ahd/2017 may be considered.

The dispute relates to the denial of higher depreciation on computer peripherals.

The assessee is in the business of Xerox, scanning & binding services. The return for the year under consideration was selected for scrutiny assessment and accordingly statutory notices were issued and served upon the assessee.

On verification of the block of assets and depreciation claimed, the A.O. noticed that the assessee has claimed depreciation @ 60% in respect of following items:-

The A.O. was of the opinion that the applicable rate of depreciation is 15% and accordingly computed the excess depreciation at Rs. 29,35,153/-.

Assessee carried the matter before the ld. CIT(A) and vehemently submitted that the impugned assets are computer peripherals and therefore the applicable rate of depreciation is 60%.

After considering the facts and the submissions, the ld. CIT(A) was convinced with the claim of depreciation on Items No. 1 to 13 of the depreciation chart

Before us, the ld. counsel for the assessee reiterated what has been stated before the lower authorities. Per contra, the ld. D.R. strongly supported the findings of the A.O.

We have given a thoughtful consideration to the orders of the authorities below. We find that the dispute arose because of the nomenclature given in the books of the accounts of the assessee. Since the assessee has used the word “copier”, the A.O. was of the opinion that on photo-copy machines, the eligible rate of depreciation is 15% and not 60% as the photo-copiers are not computer peripherals.

We find that the assessee has separately shown photo-copiers and has claimed depreciation @ 15% only. This can be seen from the schedule of fixed assets and depreciation exhibited at page 23 of the paper book.

The impugned assets on which the dispute arose are multifaceted printers having dimensional functions but at the same time, the impugned assets are printers and are part and parcel of the computer system.

The Hon’ble High Court of Delhi in the case of BSES Yamuna Powers Ltd. 358 ITR 47 has held that computer accessories and peripherals such as printers, scanners and server, etc., form an integral part of computer system and, hence, they are entitled to depreciation at higher rate of 60%.