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TMI Blog1990 (7) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... see in the cinema theatres during the year under consideration. In the opinion of the learned Commissioner the chairs fell within the definition of furniture and, therefore, qualified for depreciation at the rate of 15 per cent only as per Income-tax Rules, 1962 (the Rules). He, therefore, directed the ITO to withdraw the excess depreciation amounting to Rs. 1,10,500 and recompute the total income of the assessee. 2. The main argument of Mr. J.P. Shah, the learned counsel for the assessee, is that the Commissioner has made a totally incorrect approach to the case of the assessee. It was submitted by the learned counsel that as per provisions of section 32(1)(ii) and the proviso thereto the assessee was entitled to full depreciation at 100 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... function of plant. It is also well settled that though it is difficult to lay down any formula for determining what are office appliances but the initial test for determining the nature of the article is what is known as the test of common or popular parlance as understood by a person dealing with those articles. The second test would be the principal or primary use for which the goods are required and for which the same are capable of being used. Another test would be to see as to how the articles or goods are known in the world of trade and commerce. This view is fully supported by the cases relied upon by the learned counsel for the assessee. 5. The chairs in a cinema theatre are very much the apparatus with which the business of exhib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person only. It may be appreciated that each of the chairs being a separate unit is liable to be repaired, replaced or removed without affecting the adjoining chairs. That means that each of the chairs should make a complete unit in itself for the purpose of attraction of proviso to section 32(1)(ii) in order to grant depreciation. It is altogether a different thing that for the purpose of grant of depreciation the cost of the entire lot of chairs installed by an assessee in a particular year is taken into account. But that does not mean that each chair costing less than Rs. 750 would lose its separate and independent character which goes to make it a separate unit for the purposes of grant of depreciation. We are thus of the considered opi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oms and working out depreciation under the proviso to section 32(1)(ii) of the Act accordingly. Obviously such are not the facts in the case before us. As has been pointed out above each and every chair in a cinema theatre make an independent unit and can easily repaired, replaced or removed without affecting the system of arrangement of the adjoining or other chairs. Even in the case cited supra, the Madras High Court appears to have appreciated this aspect when it observed that the commodes, seat covers etc. in each room would not go to make an integrated sanitary system. Thus the ratio of the decision of the Madras High Court also supports our view to some extent. 8. In the result, the order of the Commissioner is set aside and the app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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