Law: Income Tax Act, 1961

Section: 256

Income tax]---Depreciation Higher rate of depreciation Machinery coming into contact with corrosive chemicals Machinery used in manufacture of sugar coming into contact with molasses Iron, lead and copper present in molasses Iron, lead and copper are not corrosive chemicals Machinery used in manufacture of sugar is not entitled to depreciation at a higher rate. Though machinery used in the manufacture of sugar comes into contact with molasses which contains iron, lead and copper, iron, lead and copper are not corrosive chemicals and hence the machinery used in the manufacture of sugar is not entitled to a higher rate of depreciation. C.I.T. v. Saraswati Industrial Syndicate Ltd: (1982) 136 ITR 758 (P & H) fol. JUDGMENT N.D. OJHA, C. J. The Tribunal, Delhi Bench "A", New Delhi, has referred the following question to this Court for its opinion under section 256(1) of the Income tax Act, 1961 ("the Act"): "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in rejecting the assessee's claim of depreciation at the rate of 15 percent. on the machinery in question?" The assessee, Gwalior Sugar Co. Ltd., Dabra, claimed depreciation at the higher rate of 15 percent. on machinery on the ground that in the process of preparation of sugar, it came into contact with corrosive chemicals. This claim has been repelled by the Tribunal, but, on an application made in this behalf the assessee, the Tribunal has referred the aforesaid question to this Court for its opinion. In repelling the claim made by the assessee, the Tribunal placed reliance on a decision of the Punjab and Haryana High Court in C.I.T. v.…

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