INCOME TAX ACT, 1961

Section 32(1)

Depreciation - Higher rate - Data processing equipments -

Assessee was public company and engaged in retail business of Apparels. The assessee during the year under consideration claimed depreciation @ 60% on its block of assets classified under data processing equipment which was consisting of software, laptop, desktop, printer scanner, etc. However, the AO held that depreciation on Data Processing Equipment should be allowable @ 15% only as the same is not computer. Accordingly, the AO disallowed excess depreciation and added to the total income of the assessee. CIT(A) also observed that the assessee was allowed depreciation at the rate of 60% on the items/block of assets classified under the head data processing equipments treating them as computers in the assessment framed under section 143(3) for the assessment year 2010-11. In view of the above, the CIT(A) deleted the disallowance made by the AO. Held: AO in the immediate preceding assessment year had allowed the depreciation on the block of data processing equipment at the rate of 60% on the assessment framed under section 143(3). CIT(A) has given very clear finding about the addition of the items under the head data processing equipments are computers/connected devices which was not controverted by the DR. There was therefore, no justification to set aside the issue to the file of the AO for fresh adjudication of the items of addition for Rs. 1,18,73,028 under data processing equipments. In view of the above and after considering the facts in totality, the assessee was entitled for depreciation on data processing equipments at the rate of 60% for the reasons as discussed above.

Applied:CIT v. Rama Krishna Jewellers 52 Taxmann.com 23 (Del-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2011-12

INCOME TAX ACT, 1961

Section 40(a)(ia) Section 194C

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