Depreciation allowed as plant & machinery on AC, telephone, office equipment

Himalaya Wellness Company Vs Deputy Commissioner of Income-tax (ITAT Bangalore)

There is no condition in section 32 that depreciation on plant and machinery is allowable only if they are used in the factory for manufacturing/production process. Assets like air conditioners, telephones, Samsung tab, office equipments and canteen equipments are in the nature of plant and machinery. Depreciation under section 32 is allowed.

Facts-

The assessee is engaged in the business of manufacture and sale of herbal pharmaceutical products (Ayurvedic medicaments and preparations), consumer / personal care products and animal health care products. AO referred the case to TPO to determine ALP in respect of international transactions entered with AE. TPO vide order u/s 92CA(3) suggested an adjustment.

AO also made the following corporate tax additions with regard depreciation on the ground that air conditioners, telephones, office equipments and canteen equipments are furniture and fixtures and not plant and machinery as claimed by the assessee.

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