Income Tax Appellate Tribunal Chennai Dcit Corporate Circle 2(1), Chennai vs Financial Software And Systems Pvt. ... on 7 June, 2019 आयकर अपील य अ धकरण, 'डी' यायपीठ, चे नई IN THE INCOME TAX APPELLATE TRIBUNAL , 'D' BENCH, CHENNAI ी एम बाला गणेश, लेखा सद य एवं ी धु वु आर.एल रे डी या यक सद य के सम BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER आयकर अपील सं./I.T. A. Nos.2564 & 25 65 /CHNY/2018 ( नधारण वष / Assessm ent Years: 20131 4 & 20 141 5) M/s. Financial Software and Vs The Asst. Commissioner of Systems Private Limited, Income Tax, 42, "Saradha", Ground Floor, 3rd Corporate Range 2, Main Road, Gandhi Nagar, Chennai 34. Adyar, Chennai 600 004. PAN: AAA CF2351C (अपीलाथ /Appellant) ( यथ /Respondent) & आयकर अपील सं./I.T. A. Nos.2584/CHNY/ 2018 ( नधारण वष / Assessm ent Years: 20131 4) The Asst. Commissioner of Vs M/s. Financial Software and Income Tax, Systems Private Limited, Corporate Range 2, 42, "Saradha", Ground Floor, 3rd Chennai 34. Main Road, Gandhi Nagar, Adyar, Chennai 600 004. PAN: AAACF 2351C (अपीलाथ /Appellant) ( यथ /Respondent) नधा रती क ओर से /Assessee by : Shri Sriram Seshadri, CA राज की ओर से /Revenue by : Shri M. Srinivasa Rao, CIT सुनवाई क तार ख/D at e o f h e ar ing : 04.06.2019 घोषणा क तार ख /D at e o f Pr o no un c e m en t : 07.06.2019 आदे श / O R D E R PER M. BALAGANESH, ACCOUNTANT MEMBER: These appeals of the assessee arise out of the orders of the Ld. Commissioner of Income Tax (Appeals)6, Chennai vide proceedings in ITA Nos. 587/CIT(A)6/201617 and ITA No.408/CIT(A)6/201617 2 ITA Nos.2564, 2565 & 2584/Chny/2018 both dated 29.06.2018 for the assessment years 201314 & 201415 respectively against the orders of assessment passed by the ACIT, Corporate Range2, Chennai (herein after referred to as Ld. AO) u/s. 143(3) of the Income Tax Act,1961 (herein after referred to as the Act). The Revenue has raised an appeal against the order of the Ld.CIT(A) for the assessment year 201314. As the issues involved in all these appeals are identical in nature, the same are taken up together and disposed off by this common order for the sake of convenience. 2. The facts of Asst Year 201314 are taken up for adjudication and the decision rendered thereon would apply with equal force for Asst Year 201415 also except with variance in figures in respect of assessee appeal. 3. The Ground No. 1 raised by the assessee is general in nature and does not require any specific adjudication. 4. The only identical issue to be decided in these appeals is as to whether the ld CITA was justified in restricting the allowance of depreciation on Automated Teller Machines (ATM) at the rate of 15% 3 ITA Nos.2564, 2565 & 2584/Chny/2018 as against the claim of 60% by the assessee in the facts and circumstances of the case. 5. The brief facts of this issue are that the assessee is engaged in the business of software development, sale, service and maintenance of ATMs for banks. The assessee entered into contracts with Banks wherein the assessee was awarded the contract to carry out end to end maintenance, software development and integration between ATMs and Banks. It is not in dispute that the ownership of such ATMs would be retained with the assessee company together with the risks and responsibilities of maintaining such ATMs. The return of income for the Asst Year 201314 was filed by the assessee company originally and later the same was revised u/s 139(5) of the Act on 19.11.2014 declaring loss of Rs 27,70,84,312/. During the course of assessment proceedings, the ld AO show caused the assessee as to why the depreciation on ATMs should be granted at the rate of 15% as against the rate of 60% claimed by the assessee. The assessee replied that it had capitalized the ATMs in its books as 'Computers' and had accordingly claimed depreciation on such machines at the rate of 60% as prescribed under the Income Tax Rules, 1962 on the basis of 4 ITA Nos.2564, 2565 & 2584/Chny/2018 functional similarities between ATMs and Computers and on the ground that ATM machines are computerized telecommunication device and