STATE BANK OF MYSORE vs. THE JOINT COMMISSIONER OF INCOME TAX

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 15TH DAY OF JUNE 2021 PRESENT THE HON’BLE MR. JUSTICE ALOK ARADHE AND THE HON’BLE MR. JUSTICE HEMANT CHANDANGOUDAR I.T.A. NO.621 OF 2016 BETWEEN: STATE BANK OF MYSORE HEAD OFFICE P.B.NO.9727 MYSORE BANK CIRCLE K.G. ROAD, BANGALORE-560009 REPRESENTED HEREIN BY ITS MANAGING DIRECTOR MR. N. KRISHNAMACHARI. ... APPELLANT (BY SRI. T. SURYANARAYANA, ADV.,) AND: THE JOINT COMMISSIONER OF INCOME TAX LARGE TAXPAYER UNITS BANGALORE. ... RESPONDENT (BY SRI. K.V. ARAVIND, ADV.) - - - THIS I.T.A. IS FILED UNDER SEC. 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 27.05.2016 PASSED IN ITA NO.1063/BANG/2014 FOR THE ASSESSMENT YEAR 2007- 08, PRAYING TO: (i) FORMULATE THE SUBSTANTIAL QUESTION OF LAW STATED ABOVE. (ii) ALLOW THE APPEAL AND SET ASIDE THE ORDER OF THE TRIBUNAL PASSED IN ITA NO.1063/BANG/2014 DATED

2 27.05.2016 FOR ASSESSMENT YEAR 2007-08 TO THE EXTENT QUESTIONED HEREIN & ETC. THIS I.T.A. COMING ON FOR FINAL HEARING, THIS DAY, ALOK ARADHE J., DELIVERED THE FOLLOWING: JUDGMENT This appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act for short) has been preferred by the assessee. The subject matter of the appeal pertains to the Assessment year 2007-08. The appeal was admitted by a bench of this Court on the following substantial questions of law: "(i) the Tribunal was correct in holding that an ATM which performs the functions of a computer such as input, process and output, could not be considered as a 'Computer' or 'Computer System' or Computer Terminal' or 'Computer Peripheral Device' for the purpose of claiming depreciation under the Act at 60%? (ii) the Tribunal was justified in placing reliance on the decision rendered in the context of ATM under the Karnataka Sales

3 Tax Act, 1952 ("KST Act") from the perspective of classification of ATM under the entry list provided in KST Act which is invoked in the event of 'sale' of such ATM without considering the aspect of usage of ATM as mandated under section 32 of the Act? (iii) the Tribunal, having regard to nature of banking business and quantum of transactions in relation to procurement of capital assets during the year, ought to have considered furnishing of 73% of the invoices in relation to capital assets acquired during the year as furnishing of substantial evidence relating to capital assets and therefore ought to have allowed depreciation under section 32 of the Act, on all the assets, i.e., 100% of the assets acquired during the year?" 2. For the reasons, assigned by us in the judgment passed today in I.T.A.No.569/2017, the order dated 27.05.2016 passed by the tribunal insofar as it pertains to Assessment Year 2007-08 is quashed insofar

4 as it pertains to findings on substantial questions of law Nos.2 and 3 and it is held that ATMs are held entitled for deprecation at the rate of 60% as computers. In the result, appeal is disposed of. Sd/- JUDGE Sd/- JUDGE ss