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of <h1>High Court rules in favor of assessee on depreciation and deductions</h1> The High Court ruled in favor of the assessee on all issues: 1) The assessee was entitled to claim depreciation at 40% for moulds used in manufacturing ... Benefit Or Perquisite To Employees, Borewell, Business Expenditure, Depreciation, Disallowance Issues involved:1. Interpretation of depreciation rate for moulds used in manufacturing rubber containers.2. Depreciation rate for borewells under the category of 'hydraulic works'.3. Disallowance of cash payments for medical expenses and insurance premiums.Interpretation of depreciation rate for moulds used in manufacturing rubber containers:The assessee claimed depreciation at 40 per cent. for moulds used in making rubber containers, citing E(2) of the Depreciation Schedule. The Income-tax Officer disagreed, applying a 10 per cent. rate for machinery and plant. The Commissioner of Income-tax (Appeals) ruled in favor of the assessee, considering the factory's separate division for manufacturing rubber goods. The Tribunal upheld this decision, stating that the assessee, with a division for rubber goods, qualifies for the 40 per cent. depreciation rate under E(2) of the Depreciation Schedule. The High Court affirmed this, emphasizing the assessee's engagement in manufacturing rubber goods, including rubber containers for batteries.Depreciation rate for borewells under the category of 'hydraulic works':Referring to a previous court decision, the High Court determined that borewells are eligible for a 10 per cent. depreciation rate, rather than the 5 per cent. rate set by the Income-tax Officer. The court relied on the precedent set in CIT v. MICO, affirming the higher depreciation rate for borewells. This decision was made in favor of the assessee.Disallowance of cash payments for medical expenses and insurance premiums:Regarding the disallowance of cash payments for medical expenses and insurance premiums, the High Court referenced a prior case involving the same assessee. In alignment with the previous decision in CIT v. Amco Batteries Ltd., the court ruled against the Revenue, allowing the deduction for the cash payments related to medical expenses and insurance premiums.
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