9911796707
TMI Blog1989 (11) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... e difference between the amount claimed and the amount allowed was as under :-- Claimed Allowed Difference Electrical installations 124901 83260 41633 2. In appeal, the C.I.T.(A) held that 15% depreciation should be allowed since electrical installations formed part of the plant. 3. The Department aggrieved with the decision of the C.I.T.(A) is in appeal before us. It is submitted that the finding of the C.I.T.(A) that electrical installations formed part of the Acetic Acid plant was not correct and further the electrical installations consisted of transformers etc. which are only stationary items and are hence entitled to depreciation only at the general rate of 10%. 4. The learned counsel for the assessee, on the other hand, submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hinery and plant for which no special rate has been prescribed, item III(ii) deals with machinery and plant for which special rate has been prescribed. Item III(ii) is again sub-divided into items A, B, C, D, E and F and the following appears as an item for which special depreciation rate of 15% is applicable, namely, item III(ii)B(7) : " Machinery and plant coming into contact with corrosive chemicals. " The first point for consideration, therefore, is whether the electrical installations in the present case comprised of the machinery and plant come into contact with corrosive chemicals. An amount of Rs. 6,18,704 represents electrical installations including lighting in the premises where Acetic Acid is manufactured and an amount of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness and it is not necessarily confined to an apparatus which is used for mechanical operations or processes or is employed in mechanical or industrial business. In order to quality as plant, the article must have some degree of durability, as for instance, in Hinton v. Maden & Ireland Ltd. [1960] 39 ITR 357 (HL), knives and lasts having an average life of three years used in manufacturing shoes were held to be plant. In CIT v. Taj Mahal Hotel [1971] 82 ITR 44 (SC), the respondent, which ran a hotel, installed sanitary and pipeline fittings in one of its branches in respect whereof it claimed development rebate and the question was whether the sanitary and pipeline fittings installed fell within the definition of plant given in section 10(5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng activity and is it a tool of his trade with which he carries on his business. The manufactures Acetic Acid and all the electrical installations formed part of the apparatus used for carrying on the business of such manufacture. The functional test as well as the final test are fully satisfied and the electrical installations in the present case are part of the plant of the assessee which manufactures Acetic Acid. This plant comes in contact with acetic acid fumes and, therefore, is clearly plant which comes into contact with corrosive chemicals. Therefore, the electrical items comprising the aforesaid plant are entitled to a special rate of 15%. Since it comes under the special rate of 15%, it falls outside the items of machinery referre ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
