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ATMs are computers and are entitled to higher rate of depreciation.

Shanti Prime Publication Pvt. Ltd.

Sec. 32, 37(1) & 145 of the Income-tax Act, 1961 - Business expenditure - The assessee is engaged in the business of manufacture of ATMs and distribution of NCR book products and commissions in India. The assessee had taken premises on lease for a period of three years and claimed expenditure of Rs. 89,23,817/- on account of leasehold improvements as revenue expenditure in the computation of income. The leasehold improvement for an amount of Rs. 89,23,817/- was disallowed and added back and depreciation towards furniture and fitting at the rate of 15% was allowed. Tribunal partly allowed the appeal of the assessee holding that “that the expenditure incurred by the assessee for leasehold improvements has to be treated as revenue expenditure under section 37 of the Act. ATMs are computers and therefore, assessee is eligible to depreciation of 60%. Even though the assessee had changed the method of revenue recognition, he is entitled to change the method of accounting as the same has no impact on the revenue. High Court dismissed the appeal of the revenue holding that “.that burden is on the department to prove that the method in vogue is not correct and distorts the profit of a particular year and the revenue has failed to discharge the aforesaid burden”. - CIT V/s NCR CORPORATION (P.) LTD. - [2020] 274 TAXMAN 139 (KARN)