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TMI Blog1991 (2) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee is processing of fish, fish meal and fish oil. The assessee claimed depreciation at 15% on the machinery used in its business on the ground that the machinery comes into contact with corrosive chemicals. The Income-tax Officer allowed the claim of the assessee. However, the Commissioner opined differently and initiated proceedings under section 263 of the Income-tax Act ("the Act" for short). Before the Commissioner, the assessee produced certificates in support of his claim that the machinery came into contact with corrosive chemicals resulting in corrosion of the machinery. However, the Commissioner did not accept the claim of the assessee. The Commissioner opined that, in the manufacture of fish meal and fish oil, no corros ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heric corrosion of the entire plant and machinery. This certificate was not accepted by the Appellate Tribunal. When discussing the details given in the certificate, in fact the reference to the report by the Appellate Tribunal assumes that the certificate confined itself to the environmental conditions only. The said report is produced before us. There is a detailed description of the process involved in the extraction of the fish products. The materials for construction of the plant and machinery also are stated. Thereafter, the report gives the observations of the Assistant Professor. It is stated that the fish catch has sea water adhering to it, chloride (Cl) is present in the charge taken into the cooking plant. "Presence of chloride ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... doubted. The Income-tax Officer in fact had accepted the claim of the assessee that the machinery came into contact with corrosive chemicals. Mr. G. Chanderkumar, learned counsel for the Revenue, contended that the finding of the Appellate Tribunal is one of fact and the Tribunal has considered all relevant materials before rejecting the aforesaid report of the expert. This we cannot agree to. No doubt the Appellate Tribunal has referred to the report but had not discussed the details furnished in the report. The question involved is a technological one and, normally, the Appellate Tribunal should have accepted the report in the absence of any other material to contradict the contents of the report. The Appellate Tribunal has ventured on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this term simply because some acid has been mixed with it for its filtration." (underlining is ours). It is clear that this decision is based on the peculiar facts of the said case. The question was whether the sugarcane juice mixed with acid becomes a corrosive chemical which, on the basis of the material available, the Bench held, was not a corrosive chemical. In the decision of the Andhra Pradesh High Court in the case of K. C. P. Ltd. v. CIT [1988] 174 ITR 225, the aforesaid decision of the Punjab and Haryana High Court was referred to but, on facts, the Bench found that there was no material at all to uphold the claim of the assessee. On facts the Bench found as follows at page 228 : "Unless the assessee initially furnishes the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9] 178 ITR 171, the same assessee was involved and the earlier decision was naturally applied. The same assessee again was a party to the decision in Saraswati Industrial Syndicate Ltd. v. CIT [1990] 183 ITR 120 before the Punjab and Haryana High Court. Once again the earlier decision was followed. The decision in CIT v. Saraswati Industrial Syndicate Ltd. (No. 1)[1989] 178 ITR 171 (P H) was also relied upon by learned counsel for the Revenue to contend that the term "corrosive chemical" is confined to "free chemical" and not "non-free chemical". The question pertains to the interpretation of the machinery provision. Depreciation is claimed under section 32 of the Act which is effectuated by rule 5 read with the relevant appendix to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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