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TMI Blog1990 (10) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act. As far as assessment years 1977-78 and 1978-79 were concerned, limitation for taking action under section 154 of the Act had expired and as such no action under the said provision could be taken for those two assessment years. For those two assessment years other action was taken. As far as assessment years 1979-80 to 1982-83 were concerned, proceedings under section 154 of the Act were initiated. 4. The following entries of depreciation table were relevant :--- (1) III (i) General rate applicable to machinery and plant (not being a ship) for which no special rate has been prescribed under (ii) hereinbelow 10% (2) III (ii) C(5) Glass manufacturing concerns except direct fire glass melting furnaces - Recuperative and regenerative glass melting furnaces 20% (3) III (ii) D(5) Glass manufacturing concern ... Moulds 30% (4) III (ii) F(5) Glass manufacturing concerns --- Direct fire glass, melting furnaces 100% 5. In the course of original assessment proceedings the following certificate from the company's directors had been placed on record on 5-8-1980 : " Certified that the company commenced production on 17th February, 1976 and has been working for triple shifts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l made it clear to the IAC(Asst.) that they agreed that mistake was required to be rectified but they did not want to give up the right of the assessee to file appeal if the assessee was advised by the senior counsel against the proposed order. The IAC(A) noted that the assessee was at liberty to take such legal action as the assessee thought fit. The IAC(A) rectified the original assessment orders for assessment years 1979-80 to 1982-83 by reducing the allowable depreciation to 10% in respect of plant and machinery except those plant and machinery which fell under Item C(5) of Appendix-I of the depreciation table. 9. The assessee filed appeals before the CIT(Appeals). The CIT(A) did not consider the question on merits. He observed that the alleged mistake could not be said to be a mistake apparent, from record. According to him, the conclusion could be reached only after prolonged arguments and as such powers under section 154 could not be exercised. He relied on the decision of the Supreme Court in T.S. Balaram, ITO v. Volkart Bros. [1971] 82 ITR 50 and some other decisions. He accordingly, cancelled the rectification orders and restored the original orders. The Department has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h express exception has been made is "direct fire glass melting furnaces". Consequently, that entry, viz., group C Item No. (5) would not apply to direct glass melting furnaces in a glass manufacturing concern. This exception is made because this item of plant and machinery is expressly mentioned as Item No. (5) in Group F which reads "Glass manufacturing concerns --- Direct fire glass melting furnaces" and depreciation of 100% is provided. If "moulds" are used by glass manufacturing concerns, depreciation at 30% would be allowable on that item under item (5) of Group D. 14. As far as item (5) of Group C is concerned, it applies only to Recuperative and Regenerative Glass Melting Furnaces used in glass manufacturing concerns. We fail to see how any other meaning could be attached to the words of the above entries. The obvious inference is that as far as glass manufacturing concerns are concerned, four rates of depreciation would be applicable, three of them are special rates and one is general rate. The first special rate would be 20% under item (5) of Group C and that rate would be applicable to only Recuperative and Regenerative Glass Melting Furnaces (which are not Direct Fire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e matter in appeal if the assessee's senior counsel so advised. 17. We may also mention that principle laid down in decisions in T.S. Balaram's case and Harbans Lal Malhotra Sons (P.) Ltd. v. ITO [1972] 83 ITR 848 (Cal.) on which the learned CIT(Appeals) has relied is not applicable to the facts of the present case. In the first case the question whether section 17(1) of the old Act of 1922 was applicable to the case of assessee firm was not free from doubt and for that reason it was held that powers of rectification could not have been exercised. In the second case, the mistake proposed to be rectified was dependent on the question whether the machinery used for production of safety razor blades could be said to be part of "iron and steel industry" and could come within the category(b) in clause (ii) of Item (III) in Part I of Appendix I of IT Rules. This question required firstly the interpretation of the expression "other machinery and plant" and, secondly, the nature of machinery and plant used by the petitioner company and whether they would come within expression "other machinery and plant" or as well as under the items mentioned within the brackets in category (b) and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d only to concerns manufacturing mineral oil or was it also available to those dealing in it (ii) was "ethyl alcohol" properly describable as mineral oil and (iii) did the fact that the product dealt in by the assessee was derived from molasses make a difference to the applicability of the entry which conferred a higher rate of depreciation on distillers and storage tanks. It was held that two views were possible in respect of some of the questions and as such powers of rectification could not be exercised. As far as our case is concerned, we have already given detailed reasons to hold that no view other than taken by the IAC in the rectification order was possible in the circumstances of the present case. Consequently, the above decision does not apply. The CIT(Appeals) did not properly apply his mind to the concerned items and was in error in holding that mistake was not apparent from record. 20. We may also mention here that the learned representative of the assessee had drawn our attention to Item No. 18 of Group C which reads "Sewing and Knitting Machines employed in the manufacture of hosiery and woollen goods" and it was argued that wherever the intention was that particul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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