2003 (2) TMI 43 - HC - Income Tax

The assessee is a company engaged in the business of running a hotel. For the assessment year 1988-89, the assessee-company claimed 100 per cent. depreciation on furniture items costing less than Rs. 5,000. While completing the assessment, the Assessing Officer disallowed this claim on the ground that these items cannot be considered as plant and machinery. - The argument of the appellant is that furniture is under a separate head and plant and machinery are also under a separate head. Furniture cannot come under plant. We agree with the argument of learned counsel for the appellant. Hence, we hold that the respondent is not entitled to 100 per cent. depreciation

Summary

The High Court of Kerala ruled against the assessee, a hotel company, in a case regarding depreciation claims on furniture items. The court held that furniture items costing less than Rs. 5,000 cannot be considered as plant and machinery for claiming 100% depreciation. The court disagreed with the Tribunal's decision and stated that furniture is separate from plant and machinery in terms of depreciation rules. The court ruled in favor of the Revenue and denied the assessee's claim for 100% depreciation, stating that the assessee is entitled to depreciation as per the applicable rules.