The Income Tax Appellate Tribunal (ITAT), Chennai bench has allowed a depreciation claim under section 32 of the Income Tax Act, 1961 by observing that the purchase of 120 computers by the assessee-Publisher cannot be treated as for personal use.
The assessee, Jaya Publications, is engaged in publications. The assessee purchased computers for Rs.51.18 Lacs and claimed depreciation thereon. In support, the assessee produced the purchase invoices. However, the AO held an opinion that the use of computers was not established and therefore, the depreciation would not be allowable. During appellate proceedings, the assessee submitted that the computers were used for office purposes and given to staff and news reporters for gathering the details. However, the CIT(A) confirmed the disallowance and held that the burden of proof could not be discharged by the assessee that the computers were put to use for the purposes of business.
A bench of Shri Mahavir Singh, Vice President and Shri Manoj Kumar Aggarwal, AM observed that “the assessee has purchased Computers for business purposes and claimed depreciation thereon. In support, the relevant invoices were produced. The only reason to disallow the depreciation is the conclusion of Ld. AO that the use of computers for business was not established. However, this conclusion is not supported by any concrete findings. The Computers so purchased by the assessee formed part of Block of Asset and the depreciation has been claimed as per law. The same is supported by the fact that the assessee has purchased as many as 120 computers which could not be said to be put for personal use. Therefore, we direct Ld. AO to grant depreciation as per assessee’s claim.”
Shri T. Vasudevan (Advocate) appeared for the assessee.
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