2003 (2) TMI 43 - HC - Income Tax

Court rules furniture items under Rs. 5,000 not eligible for 100% depreciation.

The High Court of Kerala ruled against the hotel company, stating that furniture items costing less than Rs. 5,000 cannot be claimed as plant and ... Classification of furniture as plant - distinction between furniture and fittings and plant and machinery - interpretation of Appendix I depreciation table - entitlement to 100% depreciation on specified assetsClassification of furniture as plant - interpretation of Appendix I depreciation table - entitlement to 100% depreciation on specified assets - Whether furniture items in a hotel costing less than Rs. 5,000 are 'plant' thereby attracting 100% depreciation, or must be depreciated under the separate head in Appendix I. - HELD THAT: - The Tribunal had allowed 100% depreciation on the assessee's hotel furniture by treating such furniture as 'plant', relying on CIT v. Taj Mahal Hotel. The High Court disagreed, noting that Appendix I to the depreciation table separately lists 'furniture and fittings' as an item distinct from 'machinery and plant'. On a plain reading of Appendix I, furniture cannot be equated with plant and machinery for the purpose of depreciation rates. Consequently, the assessee is not entitled to 100% depreciation on those furniture items and must claim depreciation according to the rate prescribed in Appendix I for furniture and fittings. The Court answered the question of law in favour of the Revenue and against the assessee.Assessee not entitled to 100% depreciation; depreciation to be allowed as per Appendix I classification for furniture and fittings.Final Conclusion: Appeal allowed in part; questions of law answered for the Revenue - hotel furniture cannot be treated as 'plant' for 100% depreciation and must be depreciated according to Appendix I. The High Court of Kerala ruled against the assessee, a hotel company, in a case regarding depreciation claims on furniture items. The court held that furniture items costing less than Rs. 5,000 cannot be considered as plant and machinery for claiming 100% depreciation. The court disagreed with the Tribunal's decision and stated that furniture is separate from plant and machinery in terms of depreciation rules. The court ruled in favor of the Revenue and denied the assessee's claim for 100% depreciation, stating that the assessee is entitled to depreciation as per the applicable rules.