Law:

Section:

Section 32 of the Income-tax Act, 1961-Depreciation-Whether cold storage building could be regarded as factory building-Held, no-Whether it is eligible to depreciation at the special rate of 10 per cent-Held, no Facts The assessee was running a cold storage plant. For the assessment years 1968-69 and 1969-70, the ITO allowed depreciation at the rate of 5 per cent on the cold storage building treating the same as a godown and at the general rate of 10 per cent on the electrical machinery and equipment therein. The AAC held that since the machinery was installed in the building for cold storage, the same should be held to be a factory and depreciation should be allowed at the special rate of 10 per cent. He further held that since the electrical machinery and equipment were being used for refrigeration, depreciation should be allowed at the prescribed special rate of 15 per cent thereon. The Tribunal observed that the expression "factory" was not defined in the Income-tax Act, but found that the assessee has in fact been treated as a factory under the Factories Act, 1948 for which the licence was required to be obtained. It further observed that in sub-section (4) of section 80J, no distinction was drawn between a cold storage plant and other industrial undertakings, which would undisputedly include factories. The Tribunal accordingly held that the cold storage building should be treated as a factory building and the AAC was justified in allowing depreciation at the rate of 10 per cent thereon. The Tribunal further found as a fact that the item of electrical equipment and machinery, namely, switch gears and motors formed part of the refrigeration plant and held that the rate of depreciation applicable thereof should be the prescribed rate of 15 per cent as was applicable to refrigeration and airconditioning machinery and not the general rate of 10 per cent. On reference : Held There was no finding by the Tribunal that the cold storage plant was a factory. The mere fact that a licence was taken or applied for under the Factories Act was not conclusive to establish that the undertaking concerned was a factory. The definitions of "factory" and "manufacturing…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492