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2006 (1) TMI 48 - HC - Income TaxRate of depreciation truck chassis on which the cylinders were mounted were not owned by the assessee but were taken on hire in the act size of gas cylinders not specified hence all gas cylinders are entitled to depreciation at the rate of 100%.
Issues:
- Interpretation of the term "gas cylinder" for depreciation purposes - Classification of containers mounted on trucks as plant and machinery for depreciation Interpretation of the term "gas cylinder" for depreciation purposes: The case involved a dispute regarding the depreciation rate applicable to containers/cylinders mounted on trucks. The assessee claimed 100% depreciation, arguing that the containers were essentially gas cylinders. However, the Assessing Officer disagreed, suggesting a 25% depreciation rate for plant and machinery. The court analyzed whether the term "gas cylinder" in the Income-tax Rules encompassed all types of gas cylinders, irrespective of size or specific use. The court held that the term did not specify size or purpose, concluding that all gas cylinders were entitled to 100% depreciation. By interpreting "gas cylinder" narrowly as a cooking gas cylinder, additional words would be added to the statute, which was impermissible. The court emphasized that the ownership of the truck chassis by a different entity did not negate the containers' classification as gas cylinders. Classification of containers mounted on trucks as plant and machinery for depreciation: The Tribunal upheld the assessee's claim that the containers were akin to big cylinders and thus qualified for 100% depreciation. The court concurred with the Tribunal's decision, emphasizing that the containers met the attributes of a gas cylinder and were entitled to full depreciation. The court referenced similar decisions by other ITAT benches in support of the classification of such containers as gas cylinders. Ultimately, the court dismissed the appeal by the Department, affirming the Tribunal's decision and ruling in favor of the assessee.
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