TMI Blog2022 (9) TMI 1488X X X X Extracts X X X X X X X X Extracts X X X X ..... ctivity. In Niko Resources [ 2016 (7) TMI 1328 - GUJARAT HIGH COURT] it was accordingly held reversing the decision of the Tribunal that the Tribunal was not right in law in treating mineral oil wells as Buildings for the purpose of applying rate of depreciation under Section 32 of the Act. It was held that mineral oil wells constitute Plant for the purpose of Section 32 of the Act. ITAT did not erred in law and on facts in allowing the depreciation on oil wells treating the same as Plant and Machinery - No substantial question of law. - HONOURABLE MR. JUSTICE N. V. ANJARIA And HONOURABLE MR. JUSTICE BHARGAV D. KARIA MR.VARUN K.PATEL(3802) FOR THE APPELLANT(S) NO. 1 ORDER ( PER : HONOURABLE MR. JUSTICE N. V. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he purpose of business of prospecting or extracting mineral oils. Definition of Plant under Section 43(3) of the Act was relied on and it was submitted that it had wide import. The claim of depreciation was in respect of plant by contending that oil well was part of the plant. The assessing officer discussed the issue in its assessment order to conclude that the well drilled for exploration of oil was not a Plant. The claim of the assessee was disallowed. 4.1 When the Company preferred an appeal before the Commissioner of Income Tax (Appeals) the appellate authority dealt with the said Ground No. 4 in its order dated 29.05.2016. It was held that the assessing officer had committed an error in holding that oil well was not an industrial u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and what is included in Plant for the purposes of Section 32 of the Act is no longer res integra. In Niko Resources Vs. Assistant Commissioner of Income Tax [(2017) 395 ITR 301(Guj)], the Division Bench of this Court laid down that under Section 32 of the Income Tax Act, the depreciation allowances is subject to the provisions of Section 34 and that the same is permissible only in respect of certain assets specified therein, namely, buildings, machinery, plant and furniture owned by the assessee and used for the purpose of business. 5.1 It was held that section 43(3) defines Plant , which is wide in its import. The Court held that in order to qualify as Plant, the article must have some degree of durability. The test was laid down t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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