The ITAT affirmed 60% depreciation on UPS batteries under block of assets, and allowed additional depreciation on mining machinery, following consistent judicial precedent favouring the assessee.
ITAT Upholds 60% Depreciation on UPS, Allows Mining Machinery Depreciation
The Income Tax Appellate Tribunal (ITAT) has upheld the claim of 60% depreciation on uninterrupted power supply (UPS) systems, affirming their classification under the block of assets eligible for higher depreciation. The tribunal also allowed additional depreciation under Section 32(1)(iia) of the Income Tax Act on mining machinery, aligning with earlier judicial rulings.
The department had disallowed the enhanced claim on UPS equipment, arguing inapplicability of the 60% rate. However, the ITAT held that where batteries form part of critical infrastructure ensuring industrial continuity, they qualify for accelerated depreciation. The tribunal relied on Amritsar Gas Service v. ITO and other precedents recognizing similar assets as integral to operations.
Regarding mining machinery, the ITAT observed that the asset was wholly used for industrial purposes and thus entitled to additional depreciation. The decision reaffirms that depreciation claims based on established asset classification and usage patterns will be sustained unless contrary evidence is produced. Taxpayers in capital-intensive sectors may now strengthen similar claims with reference to this order.
