TMI Blog2010 (7) TMI 1084X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 2,72,954/- made by the Assessing Officer by treating the air2 conditioner, refrigerator and office equipments to be in the nature of furniture and fixture as against plant and machinery claimed by the assessee, for the purpose of applying rate of depreciation allowable under the Act. In this case, the assessee claimed depreciation on air-conditioner, refrigerator and office equipments at 25% by treating the same as a part of plant and machinery. However, the AO was of the view that these items would come under the head `Furniture and fittings . 3. On an appeal filed by the assessee, the learned CIT(A) decided the issue in favour of the assessee by holding that all these items are covered by the classification of Plant . His find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A), the word Plant has been defined to be, in its ordinary meaning, a word of wide import and in the context of sec. 32, it must be broadly construed. It includes any article or object fixed or movable, live or dead used by a businessman for carrying on his business. It is not necessarily confined to an apparatus, which is used for mechanical operations or processes or is employed in mechanical or industrial business. The relevant test to decide whether the particular asset is plant or not, would be that whether does it fulfill the function of a plant in assessee s trading activity or is the tool of its trade, and if it is so, then it is plant, no matter that it is not very long-lasting or does not contain working parts such as a machi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sary for operating the system and no new asset of enduring benefit came into existence. It was also noted that the licence to use computer software was not transferred as such to the assessee. The software servers, which were purchased by the assessee, were to be updated from time to time. No new computer hardware was purchased so as to treat the same as capital in nature. Certain decisions were cited by the learned counsel for the assessee before the learned CIT(A), which were reiterated before us. These decisions were referred to by the CIT(A) where it was held that the amounts spent on computer software needed to be replaced from time to time, were to be as revenue in nature. In this view of the matter, we therefore, uphold the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling the same which was necessary for carrying on the business. 10. After hearing both the parties and having regard to the nature of expenditure incurred by the assessee, we find that the assessee has spent the amount towards repairing and maintenance of the building which was already in existence. No new structure was put up. What was done was to replace the dilapidated roof by fresh RCC roof inasmuch as the then existing roof was not conducive. In this respect of the matter, we find that the learned CIT(A) has rightly deleted the addition. However, depreciation allowed by the AO shall be withdrawn in the year under consideration as well as in the subsequent year on this account as whole of the amount incurred by the assessee stands al ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
