9911796707
|
Home
Issues:
Depreciation rate on printing rolls - Whether 30% depreciation is allowable or only 10% as per Income-tax Rules. Analysis: The case involved a dispute over the depreciation rate applicable to printing rolls claimed by the assessee. The Income-tax Officer allowed depreciation at 10%, but the assessee contended it should be 30% based on the definition of "patterns," "templates," and "dies" in the Income-tax Rules. The Income-tax Appellate Tribunal supported the assessee's claim based on precedents from other benches. The Tribunal observed that copper rolls serve as the base for engraving designs, which are temporary and replaced periodically. The engraving process incurs a loss of copper, claimed separately. The Tribunal compared copper rolls to "patterns, dies, and templates" justifying higher depreciation. However, the opposing view from another Tribunal held that the engraving on rolls does not qualify as a pattern, but as a model for engraving, allowing only 10% depreciation. The definition of "patterns," "dies," and "templates" was crucial in determining the depreciation rate. The absence of specific definitions in the Income-tax Act led to a reliance on dictionary meanings. "Patterns" were defined as reliable samples or models for copying, while "dies" referred to stamps for impressing designs on materials. "Templates" were described as patterns for cutting or shaping. The court concluded that printing rolls did not fit within these definitions. Despite the engraving costs being fully claimed and allowed, the focus was on whether printing rolls qualified as patterns, dies, or templates. Since the rolls were not used for embossing or engraving but for engraving work, they were deemed ineligible for higher depreciation. The court ruled in favor of the Revenue, upholding the Income-tax Officer's decision to allow depreciation at 10% instead of 30%. The interpretation of entry D-10 of Appendix 1, Part I(III) of the Income-tax Rules indicated that printing rolls did not qualify for 30% depreciation but only for 10%. The judgment did not award costs to either party, concluding the case.
|
