Law:

Section:

Section 32 of the Income-tax Act, 1961 - Depreciation - Rate/Allowance of - Assessee, whose business was of executing construction work, acquired shuttering work and claimed 100 per cent depreciation on shuttering as cost of each unit of shuttering was less than Rs. 5,000 - Whether shuttering being necessary component for construction of building, was a plant and each shuttering in itself was independent unit and since each shuttering was costing less than Rs. 5,000, that plant was entitled for 100 per cent depreciation - Held, yes FACTS The business of the assessee was executing construction work. The assessee acquired shuttering work and claimed 100 per cent depreciation on shuttering in terms of the provisions of section 32(1)(ii) as the cost of each unit of shuttering as less than Rs. 5,000. The Assessing Officer allowed a depreciation of 33/1/3 per cent on such integrated unit of plant and machinery. However, the Tribunal held each individual shuttering as machinery or plant for the purpose of allowing 100 per cent depreciation. On reference : HELD Shuttering being a necessary component for construction of the building, was a plant and each shuttering in itself was an independent unit, as that depended upon the use of shuttering in different places and each shuttering was costing less than Rs. 5,000, therefore, as per the rules, if the cost of the plant was less than Rs. 5,000 that plant was entitled for 100 per cent depreciation. In view of these facts, there was no reason to interfere in the order of the Tribunal. Note : The case was decided in favour of the assessee. CASE REFERRED TO Harijan Evam Nirbal Varg Avas Nigam Ltd. v. CIT [1998] 229 ITR 776 (All.). K.K. Bissa for the Appellant. Dinesh Mehta for the Respondent. JUDGMENT The Tribunal has referred the following question for the opinion of this court : "Whether, on the facts and in the circumstances of the case and on its interpretation of the proviso to section 32(1)(ii), the Income-tax Appellate Tribunal was legally justified in holding each individual shuttering as machinery or plant for the purpose of allowing 100 per cent. depreciation to the extent of Rs. 2,21,430 to…

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