TMI Blog1989 (2) TMI 153X X X X Extracts X X X X X X X X Extracts X X X X ..... per cent depreciation thereon under s. 32(1)(ii) of the IT Act, 1961 as the cost of each shuttering plate or tubular scaffolding was less than Rs. 750 This claim of 100 per cent depreciation was made in a revised return and the ITO declined to grant 100 per cent depreciation and, in turn, allowed depreciation @ 15 per cent only. He has discussed the point as under. In the revised return the assessee claimed depreciation of Rs. 4,41,659 claiming the depreciation is admissible at 100 per cent on steel shuttering plates and tubular scaffoldings in as much as they fall under the head plant Machinery and the cost of each item is below Rs. 750. This is provided by proviso to s. 32 (1) (ii) of the IT Act, 1961 There is no doubt that the entire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted and the whole expenditure might have had to be allowed as being of a revenue nature. It was not disputed before us that under the first proviso to s. 32 (1)(ii) the entire cost has to be allowed as depreciation where the actual cost of the plant and machinery did not exceed Rs. 750. It was also not disputed before us that so far as the various individual items of scaffoldings are concerned their cost individually did not exceed Rs. 750 each. 4. The only point for consideration therefore, is whether such individual pieces would amount to plant or whether any group thereof alone would amount to a plant. The learned counsel for the assessee contended that while erecting scaffoldings for a building or any portion thereof, the shuttering s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arrying on business. In the ultimate analysis, the inquiry which must be made is as to what operation the apparatus performs in the assessee s business. The relevant test to be applied is does it fulfil the function of plant in the assessee s trading activity? Is it the took of the taxpayer s trade? If it is, then it is plant, no matter that it is not very that it is not very long-lasting or does not contain working parts such as a machine does and plays a merely passive role in the accomplishment of the trading purpose." We, therefore, hold that the individual items of shuttering and scaffolding amount to plant and it incorrect to say that the entire stock of such things as a whole alone would amount to plant. It being admitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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