TMI Blog2013 (9) TMI 801X X X X Extracts X X X X X X X X Extracts X X X X ..... t of depreciation at 100%. Principle of interpretation contained in the legal maxim generalia specialibus non derogant.A special provision normally excludes the operation of a general provision. This principle can be resorted for deciding the competing averments of two provisions in the same enactment, a general and a special provision with some overlapping between the two - In the present case, the Fly Ash Handling System, even though classified under plant and machinery as a general item, is still qualified as a different class under the heading "Air pollution control equipment" entitled for higher amount of depreciation. Therefore, the special category, under which air pollution control equipment is placed, applies to the Fly Ash Handing System installed by the assessee. Its eligibility for higher amount of depreciation will not be shadowed by the general rate provided for plant and machinery – Decided against the Revenue. - IT Appeal Nos.2004 (Kol.) of 2009 AND 1668 & 1669 (Kol.) of 2011 - - - Dated:- 1-1-2013 - DR.O.K. Narayanan ,Pramod Kumar And George Mathan, JJ. For the Appellant : A.K. Mohapatra. For the Respondent : A.K. Tulsiyan. ORDER:- PER : Geo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ticed that this issue in ground Nos.(i) and (ii) of the revenue's appeal is squarely covered by the decision of the Co-ordinate Bench of this Tribunal in assessee's own case referred to (supra). The findings of the ld. CIT(A) on this issue stand confirmed. Consequently ground Nos. (i) and (ii) of the revenue's appeal stand dismissed. 6. In regard to ground no.(iii) of the revenue's appeal, it was submitted by the ld. DR that the issue was against the action of ld. CIT(A) in holding that "Fly Ash Handling system" was pollution controlling equipment which was entitled to the higher rate of depreciation when the fact of the manufacturing process reveal that the same was used for handling of raw material "fly ash" which is an integral part of the composite plant. It was submitted that the assessee is a company which is in the business of manufacture and sale of "asbestos corrugated sheets". The ld. DR drew our attention to the assessment order for the A.Y.2005-06 wherein this issue is discussed in detail to submit that the major raw material of the assessee company is cement and fly ash. The ld. DR also drew our attention to the Directors report for the assessment year 2005-06 wherei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essed to the General Manager of the assessee company shows that the said letter relates to the expansion of the asbestos cement sheet and accessories manufacturing plant by UAL Bengal shows that the condition as specified in the said letter in sub-clause A(iii) "there should be no manual handling/opening of asbestos fiber. The company should install fully automatic asbestos fibre debagging system before commissioning of the unit." Clause (iv) shows that "adequate measures should be adopted to control the process emission and ensure that the discharge of asbestos fibre does nor exceed the emission limit. The bag filters should be interlocked with the manufacturing process. In the event of failure of any pollution control system, the unit should be put out of operation immediately and should not be restarted until the control system is rectified to achieve the desired efficiency." A perusal of clause (vi) shows that it is specified that bags containing the fiber should be stored in enclosed area to avoid emission as asbestos fiber from damaged bags. The said clauses clearly show that the plant which has been installed and which is being claimed as pollution control equipment is in fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hearing it was fairly agreed by both the sides that the AO has disallowed the depreciation claimed by the assessee at 15% and allowed the same at 10% as the verification to show that the electrical installation were plant and machinery could not be done. It was fully agreed by both the sides that the issue can be restored to the file of AO for granting the assessee an opportunity to substantiate its case that the installation were plant and machinery as also for the verification by the AO. 10. We have considered the rival submissions. As both the sides have agreed to restore the issue to the file of AO for granting the assessee adequate opportunity to substantiate its case that electrical instalments were plant and machinery and not furniture and fixture as also to grant the AO an opportunity to verify such claim this issue is restored to the file of AO. In the circumstances ground no.(iv) of the revenue's appeal stands allowed for statistical purposes. 11. In the result the appeal of the revenue in ITA No.2004/Kol/2009 is partly allowed for statistical purposes. 12. ITA No.l668/Kol/2011 (A.Yr.2005-06) -.This is an appeal filed by the Revenue against the order of the ld. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16. Our finding in respect of ground No.(iv) of the revenue's appeal in ITA No.2004/Kol/2009 covers the issue in ground no. 1 in ITA No.l668/Kol/2011. Consequently the same is allowed for statistical purposes with similar directions in connection with ground no.(iv) in ITA No.2004/Kol/2009. 17. In the result the appeal of the revenue in ITA No. 1668/Kol/2011 is allowed for statistical purposes. 18. Our finding in respect of ground no.(iv) in ITA No.2004/Kol/2009 covers the issue in ground no. 1 in ITA No.1669/Kol/2011. Consequently our findings therein in respect of ground no.(iv) in ITA No.2004/Kol/2009 apply to ground no. 1 in ITA No. 1669/Kol/2011. Consequently ground no. 1 of the revenue's appeal stand allowed for statistical purposes. 19. Our findings in respect of ground no.(iii) of the revenue's appeal in ITA No.2004/Kol/2009 covers the issue in ground no.2 of the revenue's appeal in ITA No.l669/Kol/2011. Consequently ground No.2 of the revenue's appeal in ITA No. 1669/Kol/2011 stand allowed. 20. Our findings in respect ground nos.(i) and (ii) of the revenue's appeal in ITA No.2004/Kol/2009 apply to ground no.3 of the revenue's appeal in ITA No.l669/Kol/2011. Conseq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and machinery @ 15%. Aggrieved by the stand taken by Assessing Officer, assessee carried the matter in appeal before the Ld. CIT(A), who upheld the contention of the assessee and noted that the function of the Fly Ash Controverting System is to convert dry fly ash to wet ash. The Ld, CIT(A) further observed that besides converting the dry fly ash into wet fly ash the fly ash converting system also controls the fugitive dust emissions and the wet ash is an input in the manufacture of asbestos sheet. The Ld. CIT(A) has referred to the ill effect caused by inhalation of asbestos fibers and pointed out that in accordance with the pollution control norms of the Govt, of India and the Govt, of West Bengal make it mandatory for the assessee to control emission of asbestos fiber in the work place. The Ld. CIT(A)'s finding was that the fly ash control conversion system is not merely a "Plant and Machinery" but also a "Pollution Control Equipment". Accordingly, Ld. CIT(A) concluded that if "Fly Ash Conversion System" is eligible for grant of depreciation @ 100% being a pollution control device. Aggrieved by the relief so granted by the CIT(A), the Assessing Officer is in appeal before us. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on covers only a small part of the scope of the former expression. The fact as to whether the ash handled by the air pollution control devices is in the nature of raw material or an undesirable byproduct in my understanding is wholly irrelevant. As a matter of fact, unless the pollution control device is in the nature of machinery and plant, it is not covered by the depreciation schedule at all. As for learned Departmental Representative's notions about the clear and unambiguous scheme of the depreciation schedule, which, according to him, segregate the plant and machinery dealing with production of goods and the plant and machinery in the nature of pollution control device, I do not share this perception. In any case, I would rather resist from embarking upon this voyage of discovery to find out hidden scheme of things and thus reading what is not specified in the statute and then giving those notions force of life as if these are the words of statute. I leave it at that. 6. For the reason set out above, in my considered view the Fly Ash Handling System is in the nature of air pollution control equipment which is covered generally by entry III(3) (viii) (e) the CIT(A) was, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the head "Air pollution control equipment". In other words, the Assessing Officer treated the system installed by the assessee as plant and machinery and not as Air pollution control equipment. 3. In first appeal, the Commissioner of Income-tax (Appeals) agreed with the contentions raised by the assessee and held that the fly ash converting system installed by the assessee is to convert dry fly ash to wet fly ash and in that process of conversion, the converting system installed by the assessee controls the emission of fugitive dust and contributes to air pollution control within the factory premises. He observed that inhalation of asbestos fibers is injurious to health and, therefore, it is mandatory to follow the pollution control norms laid down by the Government of India and the Government of West Bengal and in fact the assessee is exactly doing the same thing by installing the ash converting system. Therefore, the Commissioner of Income-tax (Appeals) held that even though the system installed by the assessee is part of plant and machinery, it does not cease to be an "Air pollution control equipment". On the basis of the above finding, he allowed depreciation at the rate of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plant" and item 1 thereof says "that machinery and plant other than those covered by sub-items 1A, 2 3 below" are eligible for depreciation @ 25%. In other words, therefore, even if an asset is in the nature of plant and machinery but is covered by one of the three specific exclusions set out in this category i.e. Items 1A, 2 and 3, it should not be eligible for depreciation at the rate against main heading III but at the rate specified against respective sub heading. In sub category 3 of item no. VIII(e), under the head III 'Machinery and Plant', the specific heading is Fly Ash Handing System and the Fly Ash Conversion System and this entry is under the sub-heading "Pollution Control Equipment". It would thus, therefore, emerge from a plain look at this entry and that Air Pollution Control Equipment in the nature of items a, b, c, d e specified therein are eligible for 100% depreciation, even if these are in the nature of 'plant and machinery'. The expressions 'plant and machinery' and 'pollution control equipment' are not mutually exclusive, but, on the other hand, latter expression covers only a small part of the scope of the former expression. The fact as to whether the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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