‘iPad’ may discharge some computer functions but it isn’t a computer; not eligible for higher dep.: ITAT

Case details: Kohinoor Indian (P.) Ltd. v. ACIT - [2021] 129 taxmann.com 396 (Amritsar - Trib.)

Judiciary and Counsel Details

• • Laliet Kumar, Judicial Member and Dr. M.L. Meena, Accountant Member.
  • Sandeep Vijh, CA for the Appellant. 
  • Smt. Ratinder Kaur, DR. for the Respondent.

Facts of the Case

Assessee purchased an apple iPad during the year and claimed depreciation at the rate of 60%. Assessing Officer (AO) held that Apple had two other variants; iPhone and Mac Book. A comparison of the technical specification would reveal that the iPad has more similarities with iPhone. Both of them share the same operating system. Both the iPad and iPhone contain an inbuilt 2G/3G/4G connectivity and GPS, primarily an inherent mobile phone feature, whereas Mac Book does not contain the same.

Further, the sim card and mobile network come under the iPad & iPhone and not Mac Book. Based on this comparison, AO concluded that the iPad had more similarities with iPhone and thus was a phone and not a computer. CIT(A) upheld the order passed by AO.

Assessee contended that the iPad, which has all the computer features and performs the functions of a computer, to be treated as a computer. Even otherwise, the size of the iPad is 9.7 inches with a weight of over 600gms. It is not practical to use it as a phone. It is pertinent to mention that the assessee’s iPad can make no cellular calls as per the specifications. Further, making a cellular call cannot be the determinative factor as to whether a device is to be treated as a computer or as a phone. Phone calls can also be made using Skype or other such applications, even from desktop computers. As long as a device performs functions as described under the Information technology Act, 2000 or those that define a computer in common parlance, the device is to be treated as a computer.

ITAT held

On further appeal, Amritsar ITAT held that the predominant purpose of the iPad is communication and not a computing device. Its main features are email, WhatsApp, facetime calls, calls, music, films, etc. Though the iPad may discharge some of the functions of computers, it is not a substitution for computers or laptops. In common parlance, the iPad is considered as communicating device with some additional features of a computer.

Further, apple stores do not sell the iPad as a computer device; rather, it is selling it as communicating/entertainment device. Another reason based on which the iPad can be held as a communication device is it has an IMEI number. Though assessee had denied having an IMEI number, no concrete records have been produced on record in this regard. Accordingly, ITAT held that the iPad is not a computer; hence depreciation is applicable at a lower rate.