ITO, NEW DELHI vs. M/S. CAIRS COMPUTERS AIDED INFORMATION & RESEARCH SERVICE PVT. LTD., NEW DELHI

The only issue raised in this appeal is against the deletion of addition of Rs.61,34,096/- made on account of disallowance of depreciation on point of sales terminals ignoring the fact that the provisions of section 32 were not satisfied for claiming depreciation as the assets (POS terminals) were not put to use for the purpose of business.

Briefly stated, the facts of the case are that the assessee is engaged in the business of distribution and marketing of online lotteries organized by the Government of Nagaland. The assessee appointed some distributors in various lottery selling States. These distributors have a chain of stockists and retailers through whom the sale of lottery to the final customers is effected. In the online gaming solution, the point of sale (POS) data installed with the retailers must always be connected to the central server in order to enable the customers to purchase the lottery playing ticket. This entails uninterrupted supply of power and online connectivity for each point of sales. The AO denied depreciation by observing that the assessee failed to prove that the plant and machinery (POS terminals) were actually put to use during the year under consideration. Following the view taken in earlier years, the AO disallowed depreciation. The ld. CIT(A) deleted the addition by following the order passed by the Tribunal for the Assessment Years 2008-09 and 2009-10. The Revenue is aggrieved against the deletion of addition.

I have heard the rival submissions and perused the relevant material on record. It is noticed that the solitary issue raised in this appeal is covered in favour of the assessee by virtue of the tribunal order passed in favour of the assessee for the earlier year. A copy of the order dated 29.11.2013 has been placed on record in which similar issue has been decided in the assessee’s favour. In the absence of any distinguishing feature having been brought to my notice, I uphold the impugned order.

In the result, the appeal is dismissed.