CIT v. Kumudam Publications Pvt. Ltd.
ITA 2358/CHNY/2014
In the Income Tax Appellate Tribunal at Chennai
Before Mr NRS Ganesan, Judicial Member and Mr AP George, Administrative Member
Decided on February 12, 2019

Relevancy of the case: Whether LED panel is a computer?

Statutes & Provisions Involved

• The Information Technology Act, 2000 (Section 2(1))
• The Income Tax Act, 1961 (Section 43(1), 41(2), 32(1),50,50A)
• The Income Tax Rules, 1962 (Rule 5(1A))

Relevant Facts of the Case

• The assessee acquired one LED panel from M/s. Tricom Vision on commissioned it on 05.12.2005.
• M/s. Tricom Vision had claimed deprecation on this LED panel for the assessment year 2001-2002 and had written down value of the LED in their books as ₹8,41,579/- only. Further, the cost for this LED panel, when originally acquired by M/s. Tricom Vision, was Rs.1,80,00,000/- only.
• The assessee had paid a sum of ₹3,00,00,000/- to M/s. Tricon Vision against a written down value of ₹8,41,579/- and claimed deprecation thereon.
• It was submitted that LED Panel was only an electrical appliance and could not be allowed depreciation at the rate of 60% available to a computer, but only 10% depreciation available for an electrical appliance.

Opinion of the Bench

• Comparing the definition of a computer as stated in section 2(1) of Information Technology Act, 2000 and description of an LED Panel, the bench opined that the description of LED fits in the definition of a computer as defined in the Information Technology Act,2000.
• The bench stated that the LED has memory function, the ability for processing, and can also perform logical action by synchronising the inputs to display.

Final Decision

• The appeal of the Revenue stands dismissed. Depreciation at 60% allowed.