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2003 (4) TMI 44 - HC - Income TaxDepreciation - Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that the assessee is entitled to 100 per cent. depreciation of centering sheets as per the proviso to section 32(1)(ii) of the Act on the ground that they are individual plant/machinery? - It is true that the finding recorded by the Appellate Tribunal that each centering sheet is a plant is essentially on a question of fact and the Tribunal is the final fact-finding authority. However we have elucidated the issue on the merits in view of the importance of the question involved. - The appeals are accordingly dismissed
Issues:
1. Entitlement to 100% depreciation of centering sheets under section 32(1)(ii) of the Income-tax Act. 2. Classification of individual centering sheets as plant for depreciation purposes. Analysis: 1. The case involved appeals under section 260A of the Income-tax Act, 1961, challenging the order of the Income-tax Appellate Tribunal regarding the entitlement to 100% depreciation of centering sheets for the assessment years 1991-92 and 1992-93. The main issue was whether the centering sheets could be considered as individual plant/machinery for depreciation purposes under the first proviso to section 32(1)(ii) of the Act. 2. The respondent, a leasing company, purchased centering sheets and claimed 100% depreciation, which was initially denied by the Assessing Officer. The Commissioner of Income-tax (Appeals) upheld the denial, but the Appellate Tribunal ruled in favor of the assessee, considering each centering sheet as a plant and allowing the depreciation claim. The Revenue challenged this decision. 3. The key contention of the Revenue was that centering sheets are not used independently but collectively to form a platform for building construction activities. They argued that the centering sheets should be considered part of a bigger unit and not eligible for 100% depreciation. Reference was made to previous court decisions to support this argument. 4. The court analyzed previous judgments, including the Karnataka High Court decision regarding cages and the Madhya Pradesh High Court decision on centering material, to distinguish the present case involving individual centering sheets. They also referred to a Division Bench decision of the court regarding individual bottles as plant for depreciation purposes. 5. The court emphasized that the value of individual units, not the number of units, is crucial for determining eligibility for 100% depreciation under the proviso to section 32(1)(ii) of the Act. They highlighted that a single centering sheet could be considered a plant based on its usability for specific construction works, irrespective of being used collectively in some cases. 6. The respondent argued that the Tribunal's finding that each centering sheet is a plant was a factual determination, not involving substantial questions of law. They cited a decision of the Andhra Pradesh High Court to support this position. The court acknowledged the factual nature of the Tribunal's finding but provided a detailed analysis due to the significance of the issue. 7. Ultimately, the court dismissed the appeals, upholding the Tribunal's decision to consider individual centering sheets as plants for depreciation purposes under the proviso to section 32(1)(ii) of the Income-tax Act. No costs were awarded in the case.
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