By K. B. Bhujle, Advocate
CIT vs. Cactus Imaging India Pvt. Ltd.;
406 ITR 406 (Mad); Date of order: 16th April, 2018
A. Ys. 2003-04 and 2004-05
For A. Ys.
2003-04 and 2004-05, the assessee had claimed depreciation at the rate of 60%
on its computers. The computers included printers. The Assessing Officer held
that the printers were not normal printers, but high value printers used for
printing banners and advertisement materials of large sizes and could not be
treated as a peripheral to a computer and the printer purchased by the assessee
could not perform any other function as performed by a normal computer.
Accordingly, the claim for depreciation at 60% was denied.
Before the
Commissioner (Appeals), a video demonstration was conducted and upon going
through the technical manual of the printers, he found that the printer could
not be used without the computer and concluded that it was a part of the
computer system. Accordingly, the appeals filed by the assessee were allowed.
These orders were affirmed by the Tribunal.
On appeal
by the Revenue, the Madras High Court upheld the decision of the Tribunal and
held as under:
“i) Item III(5) of the old Appendix I to the
Income-tax Rules, 1962 stated “computers including computer software” and the
notes under the Appendix defined “computer software” in clause 7 to mean any
computer programme recorded in disc, tape, perforated media or other
information storage device. In the notes contained in the Appendix, the term
“computer” has not been defined.
ii) A printer cannot be used without a computer
and should be treated as part of the computer and an accessory to the computer.
iii) Since in respect of the very same machinery,
depreciation at the rate claimed had been permitted for the earlier years and
affirmed by the Division Bench, depreciation at the rate of 60% was allowable
on the printers.”
