Smart phones which do function equivalent to the computers – Depreciation can be claimed @60%

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 Smart phones which do function equivalent to the computers – Depreciation can be claimed @60%

ITAT DELHI

M/S. FALCON BUSINESS RESOURCES PVT. LTD. VERSUS DCIT, CIRCLE : 9 (1) , NEW DELHI

ITA No.1136/Del/2018

Short Overview of the case:

 Depreciation on mobile phones – @15% OR 60%

 Assessee is a company engaged in the business of purchase and sale of air-time for mobile phones

ITAT held as under:

This issue has been decided by the solitary decision in the case of Federal Bank Ltd. Vs. ACIT [2010 (11) TMI 115 – KERALA HIGH COURT] wherein it has been held that mobile phones are not computers and, therefore, depreciation on these mobile phones shall be allowed at the general rate of depreciation on plant and machinery @ 15%.

This being the solitary decision on the issue and is binding on us, respectfully following that we uphold that depreciation on mobile phones is allowable @ 15% and not @ 60%.

 There are smart phones which do function equivalent to the computers or much more than a computer, if the functionality of a mobile phone are shown to be more than a communication equipment, perhaps, it may qualify as a computer.

However, as no such information is available in the present case, we dismiss the appeal of the assessee.

In short, if there are smart phones which do function equivalent to the computers or much more than a computer & if the functionality of a mobile phone are shown to be more than a communication equipment then it may qualify as a computer to be eligible for depreciation @60%..

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