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The Commissioner Of Income Tax v. J K Oil Mills Ltd - INCOME TAX REFERENCE No. 200 of 1989 [2004] RD-AH 1745 (17 December 2004)


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Court No. 37

I.T.R. No. 200 of 1989

C.I.T.  Vs. M/s J.K. Oil Mills Ltd.

Hon'ble R.K.Agrawal, J.

Hon'ble Prakash Krishna, J.

The Income Tax Appellate Tribunal , Allahabad has referred the following question of law under Section 256 (1) of the Income Tax Act, 1961, (hereinafter referred to as the Act) for opinion to this Court.

Whether on facts and circumstances of the case, the Income Tax Appellate Tribunal was justified to hold that depreciation on machinery used in the Ice Factory is admissible at the rate of 15%?

The reference relates to the assessment year 1982-83. The respondent/assessee which is a public limited company is engaged in the manufacture of ice. It claimed depreciation of ice factory plant and machinery at the rate of 15%. The assessing authority, however, allowed the depreciation at the rate of 10% only. Feeling aggrieved by the order passed by the assessing authority, the respondent/assessee preferred an appeal before the Commissioner of Income Tax (Appeals), who accepted the contention of the respondent and granted depreciation at the rate of 15% which has been upheld by the Tribunal.

We have heard Sri Shambhu Chopra, learned counsel for the Revenue. No body has appeared for the respondent/assessee.

In Appendix 1 appended with the Income Tax Rules, depreciation on refrigeration machineries has been provided at the rate of 15%. The ice plant and machinery is nothing but a type of refrigeration machinery where by a process of refrigeration the water is converted into ice. The learned counsel submitted that the containers can not by any stretch of imagination  be treated as part of refrigeration plant and, therefore, the depreciation at the rate of 10% i.e. the general rate of depreciation on the items not specified elsewhere would be applicable.

The submission is misconceived. Normally the containers may not be the part of plant and machinery but in an industry which is engaged in the manufacture of ice and used refrigeration plant, the containers in which the water is kept and by a process of refrigeration is converted into ice would  be included in the word ''plant and machinery'.

We are supported in our view by the decision of Punjab and Haryana High Court in the case of CIT Vs.. Gorendra Singh Karion 133 ITR 300. In view of above discussion we are of the considered opinion that the Tribunal has not committed any error in upholding the order of the Commissioner of Income Tax (Appeals) granting depreciation at the rate of 15%.

We accordingly answer the question referred to us in the affirmative i.e. in favour of the assessee and against the Revenue. There shall be no order as to costs.

Dt. 17.12.2004



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