TMI Blog2011 (8) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... the relevant assessment year, at the notified rate of 25% - 209 of 2008 - - - Dated:- 4-8-2011 - Sunil Ambwani and Pankaj Mithal, JJ. JUDGEMENT We have heard Shri R.P. Agrawal, learned counsel for the appellant-assessee. Shri Bharat Ji Agrawal, Sr. Advocate assisted by Shri A.N. Manajan appears for the department. 2. This appeal under Section 260A of the Income Tax Act, has been preferred on substantial question of law as follows:- "I. Whether on the facts and in the circumstances, the Ld. ITAT is justified in restricting the depreciation or cold storage chambers to 10% treating them as special type of buildings and not eligible to depreciation @ 25% as plant, in view of amendment to section 43 (3) with effect from 1.4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic building and needs a separate cooling plant. The Tribunal found that for cooling plant the assessee already enjoys depreciation at the rate of 25% and that thermocol fitted chambers are entitled to depreciation at the normal rate of 10%, as given by the lower authorities. 4. Shri R.P. Agrawal, learned counsel for the appellant submits that the amendment in S. 43 (3) w.e.f. 1.4.2004 does not make any change in the definition of the word 'plant', which remains an inclusive definition. It includes buildings or furniture and fittings, which are other than, and are not integrally connected with the plant. The building, which does not have separate existence, and is integral part of the plant, used for the purposes of business or professio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , being tangible assets; and (ii) know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets acquired on or after the 1st day of April, 1998. According to Shri Agrawal the cold storage building has separate existence from the cooling plant. The table of rates at which depreciation is admissible under Appendix-I with reference to Rule 5 of the Income Tax Rules, 1962 provide for depreciation at different rates for tangible assets and which separately provides for depreciation on buildings. In case of buildings, which are used only for residential purposes, except hotel and boarding houses, depreciation is provided at 5% and for buildings other than tho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is a part of the air conditioning plant of the cold storage of the assessee, and will be entitled to special depreciation at 15% on its written down value, (as provided at that time). The Court had an occasion to consider the structure of the building of the cold storage and held that the service line was a part of the entire set up for the functioning of the cold storage. The replacement of the existing line with a new line did not result in the creation of any new asset of enduring nature. 7. The amendment in S. 43 (3) w.e.f. 1.4.2004 is only clarificatory in nature, and which excluded the live stock or buildings or furniture and fittings from the plant. What was excluded in the context was building or furniture and fittings and n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under S. 2 (7) (c) of the Finance Act, 1973 for the purposes of 1st Schedule of the Act. This judgment in our opinion, does not apply to the present case as there is no material or any plea that any manufacturing or processing of goods is carried out in the cold storage. 10. The income tax appeal is allowed. Both the questions are decided in favour of the assessee and against the department. The order of the Income Tax Appellate Tribunal dated 27th May, 2008 in I.T.A. No.353 (Alld.)/2007 for the assessment year 2004-05, M/s Shyam Enterprises, Allahabad vs. The Dy. CIT-I, Cir.I, Allahabad is set aside. The assessee will be entitled to compute and to take benefit of depreciation on the cooling chambers of the cold storage in the relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
