TMI Blog1993 (4) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... ufactured and installed in the premises of companies to which they are released. The CIT (A) also held that the assessee is entitled to depreciation of 100 percent on the value of furniture and fixture in terms of first proviso to section 32(1)(ii) of the Act as amended by the Finance Act, 1983 with effect from 1-4-1984. Revenue has taken two separate grounds to urge that the CIT (A) erred in allowing investment allowance on computer system and erred in allowing depreciation at 100 per cent on the value of furniture and fittings holding them as plant and machinery and therefore, it was prayed that the orders of the CIT (A) should be vacated and those of the Assessing Officer be restored. 3. The assessee is a company which manufactures com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid to be below Rs. 5,000. 6. This claim was rejected by the Assessing Officer, as according to him they were nothing but furniture and fixtures entitled to depreciation at 10 per cent. 7. On appeal, the CIT (A) relying on the judgment of the Bombay High Court in the case of CIT v. L.B.M. World Trade Corpn. [1981] 130 ITR 739, another decision in the case of CIT v. International Computers Ltd. [1981] 131 ITR 1(Bom.) and the decision of the Tribunal, Madras, in the case of First Leasing Co. of India Ltd. held that the claim of investment allowance in respect of cost of two computers manufactured and installed by it in the premises of two companies, the assessee is entitled to investment allowance subject to the provisions of section 80VV ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferent articles depending upon the particular facts of the case. He pointed out that in the case of Tata Hydraulic Co. dam was held as a plant because with the help of such dam the assessee derived business of generation and supply of electricity. From the depreciation schedule contained in the Income-tax Rules, buildings and furniture and fittings are to be excluded from the term plant. Therefore, he justified the action of the Assessing Officer. 10. The learned counsel for the assessee, on the other hand, submitted that so far as the first issue is concerned, the decision of the CIT (A) stands covered by the decision of the Karnataka High Court in the case of Shaan Finance (P.) Ltd. Coming to depreciation on furniture and fittings, it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbay High Court relied on the decision of the Supreme Court in the case of CIT v. Taj Mahal Hotel [1971] 82 ITR 44. The Supreme Court was concerned in that case with the question whether sanitary and pipeline fittings installed in one of its branches fell within the definition of plant and the question was answered in the affirmative because taken the sanitary and pipeline fittings separately by themselves they could satisfy the functional test of plant or taking them in the context of provision of amenities or facilities they should also satisfy the definition of plant. The heating installation of a building may be passive, but nonetheless it would be a plant. Similarly, air-conditioning equipment installed in a safe deposit vault of a ban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the functional test was required to be applied to decide the issue. It was held by the Gujarat High Court that air-conditioners or electric fans are instruments which would advance the performance of business of the assessee and therefore, they were entitled to be included within the term " plant ". In the case of CIT v. Machinery Mfg. Corpn. Ltd. [1992] 198 ITR 559 (Cal.) the claim of investment allowance on fire extinguishers and time-office equipment was rejected on the ground that they were not inextricably connected with the production of any article or thing and they were not plant or machinery installed for the purpose of business of construction, manufacture or production of any article or thing. Although the nature of the items h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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