Case Law Details
Adarsh Coopertaive Urban Bank Ltd. Vs ACIT (ITAT Hyderabad)
ATM is a computer telecommunication device that allows Bank Customers to access banking at places other than the normal bank without having to take the trouble to go to the Bank in person and collect the cash as is done under the conventional method of withdrawing money from the Bank and that the ATM Machines are computerized machines which not only allow the customers to withdraw money but they can check the account balance, pay bills, purchase goods and services and therefore, unless it is computerized and linked with the main server, it is not possible to operate the ATM. Assessee is eligible for depreciation @ 60% on ATM and other related accessories.
In the case of DCIT vs. Datacraft India Ltd (cited Supra), the Hon’ble Special Bench of the Tribunal at Mumbai was considering whether computer accessories & peripherals such as routers and switches can be classified as computer hardware, when they are used along with a computer and it was held that when their functions are integrated with a ‘computer’ and when a device is used as part of the computer in its functions, then it would be termed as a computer.
As regards depreciation @ 60% on UPS is concerned, we find that though the UPS can independently function without the assistance or integration with a computer and is an alternate mode of supply of power and does not depend on any assistance from a computer, the computer can function only on a power supply and when there is no power supply, it is connected to UPS so that it can work uninterruptedly and without losing the unsaved data when the power goes off. Therefore, in our opinion, UPS also can be considered as a computer if it is connected to the ATM Machine or a Computer and depreciation thereon is allowable at 60%. AO is directed to verify if the UPS are used for the functioning of the ATM and allow depreciation accordingly.
FULL TEXT OF THE ITAT JUDGMENT
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If ATM and accessories fall under the Asset head-Computer for charging of depreciation, what about GPS tracker device fitted in transport vehicles.