Till the financial year 2017 to 2018, the maximum rate for depreciation on printers and scanners and other peripheral devices used to be up to 40%. But it has since changed due to some court cases by the assessee against the Container Corporation of India.
As a recent judgement, the ITAT, Delhi, has declared that they will allow depreciation on UPS. They will enable an increased rate of UPS for computers up to 60% from the original. The Delhi High Court has ruled this judgement based on the fact that computer accessories such as printers, scanners, servers, etc., are integral to a computer system and dependent on the other.
In the case in question, the assessee had claimed that depreciation on UPS should be at the rate of 60%, considering the same thing as computer peripherals. The AO notices that the UPS were not an integral part of the computers, and people can use them independently. Hence, they could not allow depreciation as peripheral computer systems. They could allow only 25% for the plant and machinery. People later appealed, and the CIT(A) had to delete the addition.
Later the ITAT noticed that the CIT(A) was correct to claim the depreciation for the case based on several judicial pronouncements. Notably, the ITAT observes that the assessee had asked for depreciation on UPS for 60% in a previous case, and the AO had allowed only 25% depreciation. The issue is now allowed.
The peripheral systems and accessories of a computer provide one with input and processing. They can store files and use various other output devices such as printers, scanners, etc. These are essential for a PC and cannot work if separated from each other. Since the machines would become useless without a computer, the depreciation on devices such as scanners, printers, and peripherals is justified.
Further, computer software can also support hardware devices. Hence, they should be eligible for depreciation at 60% of the rate. The Kolkata High Court also allowed the depreciation at 60% on this ground in favour of the assessee. The court identified the computer peripherals as an integral part and let it. Thus they needed no interference, and the ground is adequate under section 80IA concerning inland ports.
The Commissioner had passed the order. People accordingly uphold the low of the CIT(A) and allow depreciation at 60% of the rate on all computer peripherals.