It is the burden of the assessee to proof that the expenditure related to the business and depreciation on computer can be claimed at 60%

Court :
Income Tax Appeallate Tribunal

Brief :
We have carefully considered the arguments of both the sides and perused the material placed before us. It is a settled law that the burden is upon the assessee to establish that the expenditure was incurred wholly and exclusively for the purpose of business. Therefore, we are unable to agree with the views of the learned CIT(A) that in order to disallow an expenditure or part of it, it is essential to record a finding that such expenditure or part thereof was for non-business purposes. However, we further find that the assessee has stated before the Assessing Officer that the aircraft was hired for the purpose of inspection of press machines located at various places. Since the inspection was required to be completed in a short span of time, chartered aircraft was used for this purpose. However, no evidence in support of this claim was produced, but, at the same time, if the Assessing Officer was dissatisfied, he should have asked the assessee\ to produce the evidence in support of this argument. From the assessment order, we do not find any opportunity having been given by the Assessing Officer to the assessee to produce the documentary evidence. The Assessing Officer simply rejected the assessee’s contention by mentioning that the assessee has failed to submit any documentary evidence. In view of the above, we deem it proper to set aside the matter to the authorities below and restore the matter back to the file of the Assessing Officer. We direct him to allow adequate opportunity to the assessee of producing the necessary evidence in support of its claim of chartering of aircraft. We also direct the assessee to produce necessary evidence/explanation before the Assessing Officer. Thereafter, the Assessing Officer will readjudicate the issue in accordance with law. We have heard both the sides and perused the material placed before us. The Assessing Officer allowed the depreciation on computer accessories and peripherals at the rate of 15% as against 60% claimed by the assessee. The learned CIT(A) directed the Assessing Officer to allow depreciation at the rate of 60% following the decision of Special Bench of ITAT in the case of DCIT Vs. Datacraft India Ltd. – 40 SOT 295 (Mum)(SB). In that case, the Special Bench of ITAT held that router and switches which are necessary for the operation of computer are to be classified as computer and, therefore, entitled to 60% depreciation. In our opinion, the ratio of the above decision would be squarely applicable to the case under appeal before us. The accessories and peripherals purchased during the year under consideration are an integral part of the computer. Therefore, the same are entitled to depreciation as a computer. Accordingly, we uphold the order of learned CIT (A) and ground No.3 of the Revenue’s appeal is rejected.

Citation :
Assistant Commissioner of Income Tax,Circle-3(1),New Delhi.(Appellant)Vs. M/s Caparo Maruti Limited,101-104, 1st Floor,Naurang House,21, K.G.Marg,New Delhi.PAN: AAACC6423G. (Respondent)