2005 (7) TMI 97

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..... hat the assessee was entitled to grant of depreciation at the rate of 100 per cent. on the cost of high efficiency boiler installed and used in the assessee's factory ?" 2. The brief facts of the case are as follows : The assessee/opposite party (hereinafter referred to as "the assessee") is a co-operative society and runs a sugar factory as well as a distillery unit. The facts of the case are that the assessee claimed 100 per cent. depreciation on a high efficiency boiler installed and used in the year relevant to the assessment year. The Assessing Officer was of the view that the assessee had used bagasse as fuel instead of coal and the boiler did not have an efficiency of 75 per cent. with economizer and with coal as fuel and, therefor .....

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..... gone through the orders of the Departmental authorities. The specification of the boiler for distillery unit as given in Schedule A to the agreement which has been placed at pages 1 to 3 of the paper book, inter alia, reveals the following : The boiler should be provided with automatic pulsating grate. The coal feeding chute of the boiler should be at the low height, i.e., about 3 metres from the factory floor level so that coal feeding can be done through a small conveyor. The boiler efficiency should be 75 per cent. + 2.5 points with coal having 35 per cent. ash content.   Boiler efficiency with economiser    with coal                 &nb .....

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..... een 75.5 per cent. We are, therefore, of the considered opinion that the assessee is clearly entitled to depreciation at 100 per cent. We will, however, like to observe that in case the assessee has claimed depreciation in the subsequent years, on the WDV after taking into consideration, the depreciation allowable at the normal rate of depreciation provided for plant because of the fact that 100 per cent. was denied in the assessment year 1989-90, the depreciation so allowed, if any, in the subsequent years will have to be withdrawn. In case, the assessee agrees to withdrawal of depreciation granted on the said boiler in the subsequent years, deduction by way of 100 per cent. depreciation should be allowed to the assessee in the year under .....

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