Case Law Details

Case Name : Dimple Vishal Agrawal  Vs ITO (ITAT Ahmedabad)
Appeal Number : ITA No. 251/Ahd/2020
Date of Judgement/Order : 09/12/2020
Related Assessment Year : 2013-14
Courts : All ITAT (7813) ITAT Ahmedabad (509)

Dimple Vishal Agrawal  Vs ITO (ITAT Ahmedabad)

ITAT held that assessee is entitled for depreciation at the rate of 60% of xerox machine WV-5745. The simple reason is that the ld.CI(A) failed to comprehend true nature of this asset. It has been treated as photo-state machine without going through literature of the machine supplied by the manufacturer. According to the manual, it is multi-functional printer. Its feature to make photo-state of a paper is an added activity. It is also pertinent to observe that admissibility of depreciation at the rate of 60% is not disputed by the ld.CIT(A). The ld.CIT(A) has granted this rate of depreciation on all other assets, which are treated as peripheral of the computer. To my mind, this asset cannot be excluded for the reasons assigned by ld.CIT(A). It is to be treated as an integral part of the computer system which helps printing from the computer connected with it. Therefore, I allow this appeal, and delete disallowance.

FULL TEXT OF THE ITAT JUDGEMENT

Assessee is in appeal before the Tribunal against order of the ld.CIT(A)-5, Vadodara dated 29.1.2020 passed for the Asstt.Year 2013-14.

2. Sole grievance of the assessee is that the ld.CIT(A) has erred in confirming the allowance depreciation at the rate of 15% as against 60% claimed by the assessee on xerox machine WV-5745.

3. Brief facts of the case are that the assessee has filed her return of income on 14.9.2013 declaring total income at Rs.8,80,560/-. The case of the assessee was selected for scrutiny assessment and notice under section 143(2) was issued and served upon the assessee. On scrutiny of the accounts, it revealed to the AO that the assessee has claimed depreciation at the rate of 60% whereas in his opinion depreciation at the rate of 15% is available on these printers, xerox-machine etc. The details of asset, rate of depreciation claimed, and allowed by the AO has been noticed by the CIT(A) on page no.2 of the impugned order. Such details read as under:

Depreciation of the asset Depreciation claimed @ of 60% Allowable depreciation @ of 15% Difference
Amount in Rs.
B/w Laser Plotter 20,603 5,150 15,453
Digital Video recorder 7,428 1,857 5,571
Oce’ plptwave 3,78,000 94,500 2,83,500
Xerox mahines 3,92,030 98,007 2,94,023
Xerox WV_5745 1,89,000 47,250 1,41,750
Total 7,40,297

4. In this way, the ld.AO has disallowed a sum of Rs.7,40,297/-. However, on appeal, the ld.CIT(A) confirmed the disallowance on Xerox machine WV-5745 i.e. last item in the table. The assessee has claimed depreciation at Rs.1,89,000/-. The ld.CIT(A) concurred with the AO on this item of asset for the purpose of admissibility of depreciation. This appeal was heard in physical court on 23.10.2020. The ld.counsel for the assessee while impugning the disallowance took me through invoice of the machines vide which it has purchased. He thereafter drew my attention towards specification and the nature of the asset. He pointed out that it is not xerox machine simplicitor, rather it is a multi-functional printer which can do photo-state work as well as printing if attaches with printer. Therefore, the ld.CIT(A) has erred in taking cognizance of the nature of this machinery. He further relied upon the decision of ITAT, Ahmedabad Bench in the case of Smt. Mamta Nirajkumar Agrawal Vs. ITO, ITA No.811 & 376/Ahd/2017. In this case also, the assessee has given nomenclature of its printer as copier. The Tribunal allowed depreciation at the rate of 60% by observing that nomenclature of the machinery in the books cannot be a decisive factor, rather it is the nature of the asset which is to be determined, and thereafter rate of depreciation be decided. On the other hand, the ld.DR relied on the orders of the Revenue authorities.

5. On due consideration of the above and circumstances, I am of the view that the assessee is entitled for depreciation at the rate of 60% of this alleged xerox machine WV-5745. The simple reason is that the ld.CI(A) failed to comprehend true nature of this asset. It has been treated as photo-state machine without going through literature of the machine supplied by the manufacturer. According to the manual, it is multi-functional printer. Its feature to make photo-state of a paper is an added activity. It is also pertinent to observe that admissibility of depreciation at the rate of 60% is not disputed by the ld.CIT(A). The ld.CIT(A) has granted this rate of depreciation on all other assets, which are treated as peripheral of the computer. To my mind, this asset cannot be excluded for the reasons assigned by ld.CIT(A). It is to be treated as an integral part of the computer system which helps printing from the computer connected with it. Therefore, I allow this appeal, and delete disallowance.

6. In the result, appeal of the assessee is allowed.

Pronounced in the Open Court on 9th December, 2020.

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