1994 (4) TMI 9 - HC - Income Tax

Calcutta High Court Remands Cold Storage Plant Depreciation Case for Further Review

The High Court of Calcutta remanded a case regarding the eligibility of a cold storage plant for enhanced depreciation as a renewable energy device back ... Rate Of Depreciation Issues:Interpretation of renewable energy device for depreciation purposes in a cold storage plant.Detailed Analysis:The High Court of Calcutta addressed a reference made by the Tribunal regarding the eligibility of a cold storage plant for enhanced depreciation as a renewable energy device under the Income-tax Act, 1961. The controversy centered around whether the cold storage plant of the assessee qualified as a renewable energy device, specifically falling within the category of solar refrigeration cold storage and air-conditioning systems. The Assessing Officer had allowed depreciation at an enhanced rate of 30% applicable to renewable energy devices, but the Commissioner of Income-tax (Appeals) disagreed, leading to proceedings under section 263 of the Act. The Tribunal, based on a certificate from a chartered engineer, ruled in favor of the assessee, prompting the Revenue to challenge the decision.The certificate provided by the chartered engineer described the operation of cold storages using electrical energy to evaporate and liquefy refrigerants like ammonia, ultimately lowering the temperature inside the storage chamber for preserving foodstuff. However, the Revenue contended that the certificate did not specifically mention examining the assessee's cold storage or confirm it was operated by a renewable energy device. Moreover, the certificate was introduced as new evidence before the Tribunal, not presented during earlier stages of assessment. The High Court acknowledged the lack of explicit certification regarding the assessee's cold storage operation as a renewable energy device, highlighting the absence of additional evidence supporting the claim.Consequently, the High Court remanded the matter back to the Tribunal for further examination. Both parties were granted the opportunity to present additional evidence to substantiate their positions. The Tribunal was tasked with reconsidering the issue in light of any new evidence provided by both the Revenue and the assessee. The decision emphasized the importance of concrete evidence to support claims of depreciation benefits for renewable energy devices in cold storage plants. The judgment concluded with no order as to costs, indicating a neutral stance on the financial aspects of the proceedings.In a concurring opinion, Justice Shyamal Kumar Sen agreed with the decision and did not offer any additional remarks. The judgment underscored the significance of evidentiary support in determining the eligibility of assets for favorable tax treatment under the Income-tax Act, reinforcing the need for specific and substantiated documentation in such matters.