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2016 (6) TMI 983 - GUJARAT HIGH COURT

2016 (6) TMI 983 - GUJARAT HIGH COURT - TMI - Depreciation on moulds - higher rate of depreciation - @ 30% OR 15% - Held that:- We notice that subclause( vii) of clause(3) of Entry III in PartA in the New Appendix I, reads as under: - “(vii) Moulds used in rubber and plastic goods factories” - Thus for mould used in rubber and plastic factories, higher rate of depreciation of 30% is prescribed. Rate of depreciation of 15% applies to residual items. Thus if an item falls under said subcla .....

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g such goods. Factory of the assessee was therefore, plastic goods factory. The moulds used for manufacturing such goods, therefore, qualify for higher rate of depreciation under subclause( vii) of clause(3) of Entry III in PartA in the New Appendix I @ 30%. - Decided in favour of assessee - TAX APPEAL NO. 747 of 2015 - Dated:- 21-6-2016 - MR. AKIL KURESHI AND MR. A.J. SHASTRI, JJ. FOR THE APPELLANT : MR KM PARIKH, ADVOCATE FOR THE OPPONENT : MR TUSHAR P HEMANI, ADVOCATE, MS VAIBHAVI K PARIKH, A .....

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terms of AppendixI to rule 5 of the Income Tax Rules, 1962 ? 2. The question arises in the following background. Respondent assessee is engaged in manufacturing plastic switches and sockets which are used as electrical appliances. For the assessment year 2006-2007, the assessee had filed return of income in which the assessee claimed depreciation of ₹ 1.57 crores on the dyes and moulds used for manufacturing such switches and sockets at the rate of 30%. The Assessing Officer during the ass .....

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are used in factory manufacturing plastic goods, higher rate of depreciation of 30% prescribed under subclause( vii) of clause (3) of Entry III in PartA in the New Appendix I, effective from assessment year 2006-2007 would apply. 3. The Assessing Officer was however, not convinced. He disallowed higher rate of depreciation and reduced the depreciation at the rate of 15% making the following observations : I have considered the submissions of the assessee. However, for the same reasons as recorde .....

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as could be made out from the definition of plastic goods industries specified in the relevant appendix reflecting depreciation rates. In view of this position of fact, the claim of the assessee for considering depreciation allowance @ 30% on moulds and dies fail because it does not answer the description of a plastic goods industry. Therefore, the assessment orders for A.Y. 2004-05 & 2005-06 are relied upon to state the case of revenue for restricting the depreciation on Dies & Moulds .....

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