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

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ITA 6458/DEL/2014Status: DisposedITAT Delhi15 June 2016AY 2010-114 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s order, noting that the issue was covered by the Tribunal's decision in favor of the assessee for earlier assessment years. No distinguishing features were presented by the Revenue.

What were the facts?

The assessee, engaged in lottery distribution, claimed depreciation on point of sales (POS) terminals. The Assessing Officer (AO) disallowed depreciation, stating the POS terminals were not put to use for business purposes. The CIT(A) deleted the addition, following previous tribunal orders.

What were the issues?

Whether depreciation can be claimed on POS terminals if they are not proven to be put to use for business purposes during the assessment year.

Which sections of the Income-tax Act were involved?

Section 32

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCHES : SMC-I : NEW DELHI

Before: SHRI R.S. SYAL

For Appellant: Shri Sanjeev Kapoor, CA
For Respondent: Shri V.R. Sonbhadra, Sr. DR
Pronounced: 15.06.2016

ORDER This appeal filed by the Revenue is directed against the order passed by the CIT(A) on 4.9.2014 in relation to the assessment year 2010-11.

2.

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.

3.

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.

4.

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.

5.

In the result, the appeal is dismissed.

The order pronounced in the open court on 15.06.2016.

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