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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether the assessee was entitled to depreciation at 40% on aircraft under the relevant depreciation schedule, or whether the aircraft fell only under the general plant and machinery entry attracting a lower rate.
Analysis: The depreciation schedule in Appendix I to the Income-tax Rules, 1962 was construed in the light of the nature and characteristics of the aircraft owned by the assessee. The controlling distinction was not the size or passenger capacity of the craft, but whether it answered the description of an aeroplane. The Tribunal followed the earlier decision on the same issue, which had already held that an aircraft having fixed wings and propelled by jets or propellers would fall within the aeroplane entry and not merely under the general plant and machinery category. That view had been affirmed by the jurisdictional High Court, and no contrary material was shown.
Conclusion: The assessee was entitled to depreciation at 40% on the aircraft, and the Revenue's challenge to the rate of depreciation failed.
Ratio Decidendi: For depreciation purposes, an aircraft with the characteristics of an aeroplane falls within the specific aeroplane entry in the depreciation schedule and cannot be confined to the general plant and machinery rate merely because of its size or seating capacity.
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