October 2014
ACIT vs. Connaught Plaza Restaurants Pvt. Ltd. ITAT Delhi `B’ Bench Before G. D. Agrawal (VP) and H. S. Sidhu (JM) ITA No. 5466/Del/2013 A.Y.: 2003-04. Decided on: 1st September, 2014. Counsel for revenue / assessee: Parwinder Kaur / Rohit Gar and Tejasvi Jain
By Jagdish D. Shah, Jagdish T. Punjabi Charted Accountants
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S. 32 – Point of Sales (POS) systems qualify for depreciation @ 60% being the rate applicable to computers.
Facts: In the course of assessment proceedings, the Assessing Officer (AO) noticed from the tax audit report that additions to Computers included a sum of Rs. 65,89,449 towards POS on which depreciation was claimed @ 60%. The AO held that POS could be regarded as computer accessories but not as computer. It is only computers and computer software which qualify for depreciation @ 60%. The rate of 60% cannot be extended to computer accessories and peripherals. He rejected the contention of the assessee that the POS systems are capable of performing the basic functions performed by a computer such as data processing, storage, etc and therefore are similar to computers. The AO allowed depreciation on POS @ 25% i.e. the rate applicable to normal plant and machinery.
Aggrieved, the assessee preferred an appeal to CIT(A) who following the decision of the Delhi High Court in the case of CIT vs. Rajdhani Powers Ltd. (ITA No. 1266/2010) decided the issue in favor of the assessee.
Aggrieved, the revenue preferred an appeal to the Tribunal.
Held:
The Tribunal noted that the CIT(A) had on perusing the technical specifications of POS from the brochure filed held that the POS terminal is akin to computer in terms of basic features and can be categorized as `Computers’. It also noted that he had followed the order of the jurisdictional High Court in the case of CIT vs. Rajdhani Powers Ltd. (supra) and therefore no interference was called for.
The appeal filed by the revenue was dismissed.
