1997 (10) TMI 49 - HC - Income Tax

High Court orders Tribunal to reconsider centering material as plant for depreciation

The High Court of Madhya Pradesh directed the Tribunal to gather evidence to determine if each plate of centering material could be considered a plant for ... Depreciation, Rates, Construction, Plant Issues:- Interpretation of depreciation on centering material under section 32 of the Income-tax Act, 1961.Analysis:The High Court of Madhya Pradesh addressed an income-tax reference concerning the entitlement to depreciation at 100% on centering material under section 32 of the Income-tax Act, 1961. The dispute arose when the Assessing Officer restricted the depreciation claim to 33.33%, which was later allowed by the Commissioner of Income-tax (Appeals) based on a precedent from the Income-tax Appellate Tribunal. The Tribunal upheld this decision, leading to the Department's appeal. The Department argued that the centering material should be considered collectively as part of plant and machinery, exceeding Rs. 5,000 in cost, rather than individually for depreciation calculation. The Tribunal's reliance on a previous judgment was questioned by the High Court, emphasizing the lack of evidence on whether individual centering materials could suffice for construction purposes or if they needed to be combined to constitute a plant. Consequently, the High Court directed the Tribunal to gather necessary evidence and determine if each plate of centering material could be considered a plant, remanding the case for further examination and fresh decision.