Income Tax, Issue Update

Rate of depreciation in case of ATM machines

Case: Commissioner Of Income Tax-III Vs. NCR Corporation Pvt Ltd, Karnataka HC

Outcome: Partial


  • The Assessee Company had claimed depreciation at the rate of 60% on the ATM machine. During the course of assessment proceedings, the Assessing Officer opined that the depreciation on ATM machine will be availed at the rate of 15%, thus rejecting the contention of the Assessee.

Key points

  • Reliance was placed on the decision of Bombay High Court in the case of DCIT vs. Data Craft India Ltd., wherein it was concluded that so long as functions of the computers were performed with other functions and other functions were dependant on the functions of the computer, ATM’s were to be treated as computers and were entitled to higher rate of depreciation.
  • It was further held that computer was integral part of ATM machine and on the basis of information processed by the computer in ATM machine only, the mechanical function of the dispensation of cash or deposit of cash was done.
  • Hence, it was inferred that ATM’s were computers and were entitled to higher rate of depreciation.

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