Case Law Details
NXP India Pvt. Ltd Vs DCIT (ITAT Bangalore)
ITAT Bangalore based on the judgement of Datacraft India Ltd. held that if the networking equipment is used as a part of the computer in its functions, then the same will be classified as computers for the purpose of depreciation.
Facts-
The assessee is among the top 5 MNC employers in the semiconductor space and is a major force in the Indian Semiconductor space and as a contract development service organization. The core areas of the assessee’s activities in India include development, design and sales agent support services. The assessee creates semiconductor related system solutions and software that deliver better sensory experience in mobile phones, personal media players, identification applications, cars and a wide range of other electronic devices.
Notably, the assessee acquired certain networking equipment during the year under consideration and the same have considered as addition to 60% depreciation block of assets. The AO held that the networking equipment cannot be classified as Computers and therefore allowed the depreciation at 15% instead of 60% and made the addition for the difference. The DRP confirmed the addition on the same ground.
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