Brief of the case
Assesse claimed depreciation on centering and shuttering material at rate of 100% treating said items as ‘plant’. A.O. allowed assesse’s claim in respect of items having value of less than Rs. 5000. In respect of remaining items the A.O. allowed depreciation at rate of 331/3%. Commissioner (Appeals) as well as Tribunal allowed assesse’s claim.
High Court confirmed the Tribunal’s order and held that individual units of centering /shuttering material when used collectively , they constitute ‘plant ’even if said items cannot be used on stand alone basis .the High Court thus concluded that centering /shuttering materials would be entitled to 100% depreciation in terms of first proviso to section 32 (1).
Facts
- The assessee , engaged in the activity of building construction, was using the shuttering material as the individual plates, for providing support to the reinforced concrete and cement or the poles and bars that are used at the time of formation.
- The assesse claimed deduction of Rs.17,93,556/- being depreciation on machinery, centering and shuttering equipments at the rate of 100%. The assets included machinery below Rs.5,000/- each of the value of Rs.3,88,562/- and centering and shuttering equipments of the value of Rs.13,19,434/-.
- The Assessing Officer allowed depreciation to the extent of 33 1/3 % on the centering and shuttering materials.
- The Commissioner (Appeals) allowed the appeal and directed the Assessing Officer to allow 100% depreciation as provided for in the proviso to Section 32(1)(ii) of Income Tax Act, 1960.
Contention of Assesse
That without shuttering no building can be erected and, therefore, the shuttering material is an essential part for carrying on the construction work by the assesse every individual material/component of shuttering or centering, such as a steel plate or wooden plank, could be treated as plant and deserve 100% depreciation.
Contention of Revenue
