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C.I.T. versus M/S A.B.CORP.LTD.

High Court of Judicature at Allahabad

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C.I.T. v. M/S A.B.Corp.Ltd. - INCOME TAX REFERENCE No. 245 of 1992 [2005] RD-AH 753 (16 March 2005)


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Court No. 37

I.T. R. No. 245 of 1992

C.I.T. Vs.. M/s Agra Beverages Corpn. Pvt.Ltd.

Hon'ble R.K.Agrawal, J.

Hon'ble Prakash Krishna, J.

The Income Tax Appellate Tribunal, New Delhi 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, the Income Tax Appellate Tribunal was legally correct in holding that the bottles and crates in assessee's case did not constitute its stock in trade and should be treated as plant.?"

The assessment year 1983-84 is involved in the present reference. The respondent/assessee is a private limited company deriving income from manufacture and sale of soft drinks. It claimed 100% depreciation on bottles and crates valued at Rs. 20,24,706/- treating them as plant used in the business of manufacture of soft drinks. The claim was disallowed by the Assessing Officer but has been allowed both by the C.I.T. (Appeals) as well as by the Tribunal.

Having heard the learned counsel for the department, we find that the bottles and shells used for bottling the soft drinks have been held to be plants by the Rajasthan High Court in C.I.T. Vs. Jai Drinks (P) Ltd (1988) 173 ITR 100. Patna, Delhi and Gujarat High Courts have also taken similar view in the case of  CIT V. Steel City Beverages (P.) Ltd, (1996) 222 ITR 744,745 (Pat); CIT Prem Nath Monga Bottlers (P.) Ltd, (1997) 226 ITR 864,865-66 (Del); CIT Vs. Saurashtra Bottling Pvt. Ltd, (1998) 232 ITR 270, (Guj).

In view of the aforesaid discussion, we answer the question referred to us in the affirmative i.e. in favour of the assessee and against the department. However, there shall be no order as to costs.

Dt. 16.3.2005



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