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Income Tax Appellate Tribunal, MUMBAI BENCH “C”, MUMBAI
Before: SHRI MAHAVIR SINGH & SHRI RAJESH KUMAR
Per Rajesh Kumar, Accountant Member:
The present appeal has been preferred by the assessee against the order dated 28.04.2017 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2014-15.
The issue raised in ground No.1 is against the order of Ld. CIT(A) confirming the addition of Rs.6,90,651/-by upholding the order of AO restricting the depreciation @ 15% as against the 60% claimed by the assessee on ATM machines on the ground that they are not part of computer system whereas the issue in 2 M/s. Chembur Nagarik Sahakari Bank Ltd. ground No.2 is against the order of Ld. CIT(A) upholding the order of AO wherein a depreciation on UPS batteries were allowed @ 10% instead of 60% claimed by the assessee.
At the outset, the Ld. Counsel of the assessee submitted before the Bench that the issue is squarely covered by the decision of the Hon’ble jurisdictional Bombay High Court in the case of CIT vs. Saraswat Infotech Ltd. in of 2012 order dated 15.01.2013 wherein identical issue has been decided in favour of the assessee. The Ld. A.R. therefore prayed before the Bench that the same may kindly be decided by allowing the ground raised by the assessee.
The Ld. D.R., on the other hand, fairly agreed to the contentions of the Ld. A.R. that there is a decision of the Hon’ble Bombay High Court on the issue which cover the dispute squarely.
After hearing both the parties and perusing the material on record and also the order of the Hon’ble Bombay High Court as referred to above, we observe that identical issue has been decided in favour of the assessee wherein it has been upheld that depreciation on ATM machines are to be allowed @ 60%. The question of law raised in the case of CIT vs. Saraswat Infotech Ltd. (supra) is reproduced as under: “b) Whether on the facts and circumstances of the case the ITAT was right in holding that depreciation on ATM is allowable @ 60% ignoring the fact that ATM is a cash dispensing machine with a projector and therefore is in nature of plant and machinery and therefore depreciation should be provided @ 15%.”
While deciding the above substantial question of law the Hon’ble Bombay High Court has held that the Revenue has failed to 3 M/s. Chembur Nagarik Sahakari Bank Ltd. show that the finding of the Tribunal are perverse and thus upheld the order of Tribunal wherein the co-ordinate bench of the Tribunal has held that UPS and ATM are to be allowed @ 60%. The relevant finding of the said decision is as under: “2) The respondent assessee is a subsidiary of SaraswatCo. op. Bank Limited and provides software development, information technology and enabled services to its holding company i.e. Saraswat Bank. During the course of the year, the respondent assessee had purchased certain capital assets such as UPS, ATM Machines and Software Licence to inter alia provide technology services to its holding company. The respondent assessee claimed depreciation on UPS and ATM machines under the block of computers .@ 60% while depreciation was claimed on software @ 30% (50% or 60%) in view of use only for a par.t of the year.
3) The Assessing officer was of the view that the UPS and ATMs would not fall under the category of computers and being part of plant and machinery/office equipment would be eligible for depreciation only at 15%. Similarly, he disallowed the claim for depreciation On software licence On tile ground that the Same was not put to use in the previous year to the assessment year 2008-09. Consequently the excess claim of depreciation made by the respondent assessee was disallowed.
4) In appeal the CIT (Appeals) upheld the findings of the Assessing officer.
5) In second appeal, the Tribunal by its order dated 14/3/2012 held that UPS is an integral part of the computer system and regulate the flow of the power to avoid any kind of damage to the computer network due to fluctuation in power supply which could lead to loss of valuable data. The Tribunal relied upon the decision of the Delhi High Court dated 20/1/2011 in the matter of CIT v. Orient Ceramics and Industries Ltd, in which UPS was held to be the part of the computer system and depreciation at 60% was allowed. Similarly, so far as ATMs are concerned, the Tribunal on finding of fact concluded that ATM cannot function without the help of computer and would be a part of the computer used in the banking industry. Reliance was placed by the Tribunal upon the decision of the Delhi Bench of Tribunal in the matter of DCIT v. Global Trust Bank (ITA No.474/0/09) wherein it has been held that ATM was a computer equipment and depreciation @ 60% was allowed. So far as the use of software is concerned, the Tribunal records a fact that the evidence of the use of the software on 31/3/2008 . was produced before the Tribunal. Thus, the Tribunal held that depreciation @ 30% on software was rightly claimed.
6) We note that the Tribunal has arrived at a finding of fact on all the three questions. The revenue has not been able to show that the above finding of fact is perverse. Thus, we do not see any reason to entertain question (i), (ii) and (ill) above.”
We, therefore respectfully following the decision of the Hon’ble Bombay High Court, set aside the order of Ld. CIT(A)
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 25.06.2019.