Life saving medical equipment entitled to higher rate of depreciation at 40%

INCOME-TAX APPELLATE TRIBUNAL and CHENNAI A BENCH

I.T.A. Na. 1300/Mds/2013 (assessment year 2009-10).

ASSISTANT COMMISSIONER OF INCOME-TAX ...........................................Appellant.
v.
BBARAT SCANS P. LTD. .....................................................................................Respondent

DR. O. K. NARAYANAN (Vice-President) and VIKAS AWASTHY (Judicial Member)

Date :February 13, 2014.

Appearances

Shaji P. Jacob, Indian Revenue Service, Additianal Cammissiner of Incame-tax, far the appellant.
V. Srinivasan, Incame-tax Practitioner, for the respondent.

Section 32 of the Income Tax Act, 1961 — Depreciation — Life saving medical equipment entitled to higher rate of depreciation at 40%

FACTS:

Assessee has claimed higher depreciation @ 40% on PE/CT scan claiming it to be lifesaving medical equipment. AO held that medical diagnostic equipment installed by assessee was to be considered in the nature of SPECT gamma camera and entitled to depreciation at lower rate. On appeal by assessee, CIT(A) held in favour of assessee. Being aggrieved, Revenue went on appeal before Tribunal.

HELD,

that the PET/CT scan was very much used in treatment of cancer. It gives both anatomic and metabolic information to assess the present condition of cancer growth in a patient. It was very essential in assessing the condition of patients suffering from cancer even at advanced stage and was also used for treatment of heart diseases and neurological diseases. Thus, machine was entitled to depreciation at higher rate of 40%. In the result, appeal was answered in favour of assessee.

ORDER

The order of the Bench was delivered by

DR. O. K. NARAYANAN; (Vice-President)-This appeal is filed by the Revenue. The relevant assessment year is 2009-10. The appeal IS directed against the .order of the Commissioner of Income-tax (Appeals)-ill at Chennai, dated February 18, 2013 and arises out .of the assessment completed under section 143(3) of the Income-tax Act, 1961.

The only issue raised by the Revenue in the present appeal is whether the medical diagnostic imaging equipment installed by the assessee could be considered in the nature of SPECT gamma camera and if so, entitled to for depreciation at 40 per cent.

The assessee has claimed higher amount of depreciation on PET/CT scan claiming it to be lifesaving medical equipment. This issue has been considered by the Commissioner of Income-tax (Appeals) in a very detailed manner in the light of the technical and medical details furnished before her. On going through the detailed discussion regarding the nature and use of PET/CT scan, we do not have any doubt to uphold the order of the Commissioner of Income-tax (Appeals). The PET/CT scan is very much used in the treatment of cancer. The PET/CT scan gives both anatomic and metabolic information to assess the present condition of cancer growth in a patient. This instrument is useful not only in detecting cancer but also in treating the cancer by making a proper assessment of the condition of the patient. The PET/CT scan is also very essential in assessing the condition of patients suffering from cancer even at the advanced stage. This imaging technology is used not only in the treatment of cancer but also in the treatment of heart diseases and neurological diseases, as the PET/CT scan delivers the condition of vascular system of a patient.

In these circumstances, we uphold the order of the Commissioner of Income-tax (Appeals). The PET/Cf scan is entitled for higher rate of depreciation at 40 per cent.

In the result, the appeal filed by the Revenue is dismissed.

The order pronounced in the open court at the time of hearing on Thursday, the 13th of February, 2014 at Chennai.

[2014] 31 ITR [Trib] 103 (CHENNAI)