Depreciation on diesel generating set upheld where consistent treatment of similar assets supported the higher allowance.

Depreciation at 15% on a diesel generating set was upheld for the assessment year 1983-84 because the Tribunal's allowance was supported by the nature of the machinery, consistent treatment of similar assets in earlier and later years, and its own prior decisions on generating sets. The Gujarat HC declined to disturb that view on revisional interference under section 263, finding no reason on the peculiar facts to displace the factual and comparable-decision basis for the claim. The allowance was therefore sustained in favour of the assessee.

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Issues: Whether depreciation at the rate of 15 per cent on a diesel generating set was allowable for the assessment year 1983-84.

Analysis: The depreciation claim was examined in the light of the nature of the machinery, the treatment given to similar machinery in earlier and later assessment years, and the Tribunal's reliance on its own prior decisions allowing higher depreciation on generating sets. The Revenue's revisional interference under section 263 did not persuade the Court to disturb the Tribunal's view in the peculiar facts of the case.

Conclusion: The Tribunal was justified in directing allowance of depreciation at 15 per cent on the diesel generating set, and the question was answered in the affirmative, in favour of the assessee and against the Revenue.

Ratio Decidendi: Where consistent allowance of depreciation on the same asset in earlier and later years supports the claim, and the Tribunal's view is supported by the factual matrix and comparable decisions, interference with the allowance is not warranted.

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