Case Law Details
CIT Vs NCR Corporation Pvt Ltd (Karnataka High Court)
Whether the tribunal is correct on facts and in law in holding that ATMs and encoders are computers eligible for 60% depreciation even when they do not provide processing activity and do not contain all features of computers and such cannot be called as computers?
It is pertinent to note that provisions of the Karnataka Sales Tax Act, 1957 and provisions of Income Tax Act, 1961 are not pari materia provisions. The classification of goods has been provided only for the purposes of sales tax whereas, the provisions of the income tax levy tax on income. It is pertinent to mention here that Appendix 1 to Income Tax Rules, the computer has been treated as plant and machinery. Therefore, the decision relied upon by the revenue in DIEBOLD SYSTEMS PVT. LTD., supra has no application to the fact situation of the case. The tribunal by placing reliance on the decision of Bombay High Court in ‘DCIT VS. DATA CRAFT INDIA LTD.,’, (2010) 40 SOT 295 has held that so long as functions of the computers are performed with other functions and other functions are dependant on the functions of the computer, ATMs are to be treated as computers and are entitled to higher rate of depreciation. It has further been held that computer is integral part of ATM machine and on the basis of information processed by the computer in ATM machine only, the mechanical function of the dispensation of cash or deposit of cash is done. Therefore, it was held that ATMs are computers and are entitled to higher rate of depreciation.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
This appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act for short) has been preferred by the revenue. The subject matter of the appeal pertains to the Assessment year 2003-04. The appeal was admitted by a bench of this Court vide order dated 06.02.2012 on the following substantial questions of law:
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