Electric furnace qualifies as a machine tool for higher depreciation, with the issue answered in favour of the assessee.

An electric furnace was treated as a machine tool for depreciation purposes, and depreciation at 15% was allowed to the assessee. The High Court noted that an identical reference for the preceding assessment year had already been declined, and the Revenue's section 256(2) petition had been dismissed without any reversal of that position. On that basis, the question was answered in the affirmative and in favour of the assessee, confirming eligibility to the higher depreciation rate as a machine tool.

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Issues: Whether an electric furnace falls within the category of "machine tools" so as to qualify for depreciation at 15%.

Analysis: The question referred arose from the Revenue's challenge to the allowance of depreciation at 15% on an electric furnace as a machine tool. The Court noted that for the preceding assessment year an identical reference had been declined and the Revenue's petition under section 256(2) of the Income-tax Act, 1961 had also been dismissed, with no reversal of that order shown.

Conclusion: The question was answered in the affirmative and in favour of the assessee, holding that the electric furnace is entitled to depreciation at 15% as a machine tool.

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