9911796707
TMI Blog2001 (4) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... and in the circumstances of the case, the Appellate Tribunal is justified in allowing 30 per cent. depreciation on rig and compressor used in boring the wells, in accordance with entry D(4) of the Depreciation Schedule under the Income-tax Rules ? (2) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in law in holding that the assessee-firm which carries on the business of drilling borewells is an industrial undertaking engaged in manufacturing or producing articles or things and is entitled to relief under section 32A of the Income-tax Act (hereinafter referred to as 'the Act' for convenience) ?" The events need to be mentioned chronologically as indicated below (1) The origin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted july 31, 1996) (CIT v. Gangotri Tube Wells (P.) Ltd. [1998] 229 ITR 87). He referred to annexure R/5. Shri Chaphekar submitted that now the same questions have been answered by the Division Bench of this High Court. There is no need to answer them again. He prayed that these petitions be dismissed. After perusing annexure R/5, this court finds that the Division Bench of this court has answered these two questions by the judgment mentioned above. Bearing this, this court concurred with the view taken by the Andhra Pradesh High Court in the matter of CIT v. Super Drillers [ 1988] 174 ITR 640. Thus, this court does not find any reason for allowing these petitions. However, the Division Bench has not dealt with the subject which has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lting furnaces, (6) juice boiling pans (karhais) (N.E.S.A.), (6A) Machinery used in the manufacture of electronic goods or components, (7) Motor-cars, motor cycles, scooters and other mopeds (N.E.S.A.), (8) Sugarcane crushers (indigenous kolhus and belans) (N.E,S.A.), In the present case, the Assessing Officer permitted the respondents to get the benefit of depreciation at 30 per cent. rate. However, the Commissioner of Income-tax, Bhopal, reduced it to 15 per cent. Therefore, now it is to be seen whether the respondents were entitled to get the said depreciation at 30 per cent. rate or at 15 per cent. rate ? Whether the machinery which has been used for digging tube-wells and borewells falls under the thirdly of the said Appendix o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 1982) at pages 497 and 498. It found that the Tribunal had extracted the information from the encyclopaedia to support that the earth-movers include heavy duty trucks with highsided dump bodies, self-propelled or towed scrapers, wagons and bulldozers. There was further information that drilling equipment should be regarded as "construction equipment" as holes are drilled in rocks for wells and for blasting, grounding and exploring. Drills are classified according to the way in which they penetrate rock, viz., percussion, rotating percussion and rotary. In smaller sizes, these drills may be hand-held but for production work, they are mounted on masts which are supported by trucks or special trucks mounted on drillings. Having regard to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge caused to it, in the nature of wear and tear in its use in a commercial concern, business or factory. Drilling machines used by companies engaged in the work of drilling bore-wells and tube-wells drill different materials of rough and tough as the rocks. It penetrates the granite layer also and thereafter, the material in the form of "water" is made available and "produced". Therefore, though it has not been so specifically mentioned by item No. D(4) or D(7), it comes at par with the items described by item Nos. D(4) and D(7). It is to be noted that item No. D(7) speaks of rigs, etc. Keeping in view that aspect, the depreciation should be at 30 per cent, By any stretch of imagination, it cannot be 15 per cent. as indicated by thirdly in ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
