INCOME TAX ACT, 1961

Section 32(1)

Depreciation - Rate of depreciation - ATM machines -

Assessee claimed depreciation on ATM machines @ 60% as applicable to computers. AO restricted assessee's claim to 15% while.Held: Words and expressions defined in one statute as judicially interpreted do not afford a guide to construction of the same words or expression in another statute, unless both the statutes are pari materia legislations or it is specifically provided in one statute to give same meaning to the words as defined in another statue. The Karnataka Sales Tax Act and IT Act, 1961 are not similar, i.e., pari materia legislations. In the matter of interpretation of an entry under sales tax laws 'Trade Test' or 'Common Parlance Test' is applied while considering whether a particular item/goods fall in an entry or not, whereas under IT Act, 1961, particularly when considering whether an item is to be considered as 'plant and machinery' and/or 'building' or any of the items specified in the Appendix to Income Tax Rules, 1962, functional test is the decisive test. As ATM fulfilled functions of a Computer in business activity of assessee, AO was directed to allow depreciation @ 60% as claimed by assessee.

Relied:CIT v Anand Theatres (2000) 244 ITR 192 (SC) : 2000 TaxPub(DT) 1385 (SC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2015-2016 & 2016-2017

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