As far as the present case is concerned, we must point out to the agreement with the landlord, which showed the payment of consideration for the surrender of tenancy rights. The Revenue does not dispute the existence of such an agreement. It is also not disputed by the Revenue that the purchase of the premises by the assessee was from M/s. Harsaran Singh Constructions Pvt. Ltd., which had nothing to do with the landlord. Given the fact that tenancy right is a capital asset, as held by the Apex Court in the decision reported in CIT v. D.P. Sandu Bros. Chembur (P.) Ltd.  273 ITR 1 that the surrender of tenancy rights amounted to transfer and hence, being a capital receipt, on the facts thus placed before this Court that the amount paid on account of surrender of tenancy rights being given by the assessee to the builder, there is no exchange of one property for the other. Hence, we have no hesitation in accepting the plea of the assessee, thereby rejecting the Revenue’s contention raised in all these Tax Cases. Consequently, we hold that the assessee is entitled to depreciation.
Higher depreciation on plastic mould to be allowed only if asset used in a business constituting a separate unit
The First Appellate Authority in earlier year pointed out that though the assessee did not have a rubber or plastic goods factory exclusively, it had a unit wherein moulds and moulding tools for manufacturing plastic covers, seals, shrouds were installed and such plastic covers, seals, etc. manufactured were finally utilized in the manufacture of products dealt in by the assessee. He had also pointed out that installation of the moulds and moulding tools in the factory of the appellant was never in dispute. The said order of the Commissioner is dated 7-11-1996. From the order dated 19-7-2000 relating to the assessment year 1999-2000 it was found that the Joint Commissioner, while passing the giving effect to order of the Commissioner dated 21-9-1999, had granted the relief under section 80HH in respect of Pondicherry Unit. In the background of the said facts, even though the document placed before this Court dated 23-9-1991 is an acknowledgement from the Government of India, Ministry of Industry, Department of Industrial Development, Enterpreneur Assistance Unit and as per the memorandum submitted by the assessee, it is for the manufacture of Item Code 85365001 relating to Other Switches of Plastics; Item Code 85365009 relating to Other Switches of Other Materials; Item Code 85366901 relating to Plugs and Sockets of Plastics and Item Code 85366909 relating to Plug and sockets of other materials, in the unit at Pondicherry, yet, for the purpose of considering the relief of depreciation at the rate of 40 per cent, in the interest of justice, the matter should be remitted back to the Assessing Officer for the purpose of finding out whether recognition has been granted to the said unit as a separate unit. If the unit established is a separate unit, then the assessee will be entitled to claim depreciation at the rate of 40 per cent.
Source- CIT Vs. Areva T & D India Ltd. (Madras High Court) , TAX CASE (APPEAL) NOS. 1184, 1185 & 2694 OF 2006, Dated- 03.09.2012
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