TaxTMI 
TaxTMI 
2016 (9) TMI 761
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....depreciation on electrical installations & 15% i.e. the rate applicable to 'Plant & Machinery' amounting to Rs. 59,40,787/-. 2. That on the facts and circumstances of the case and in law the Ld. CIT(A) erred in allowing additional depreciation amounting to Rs. 1,02,12,533/- considering electrical installations as part of furniture and fixture. 3. That on the facts and circumstances of the case and in law the Ld. CIT(A) erred in holding that electrical installations formed an integral part of the assessee's plant, therefore, depreciation was allowable at the rate applicable to 'Plant & Machinery' whereas depreciation to electrical fittings can only be allowed under "Furniture & Fittings" as per II Part A....
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.... for scrutiny through CASS under the category 'Compulsory 44AB' and notice u/s 143(2) of the IT Act dated 12-10-2007 was issued and served to the assessee within the prescribed time. Thereafter, notice u/s 142(1) dated 10-03-2008 was issued and served upon the assessee fixing the date of hearing on 18-03-2008. In compliance to the above notices Assessee's Authorised Representative and official of the assesee company attended the proceedings and produced the details called for which have been verified on test check basis. Thereafter, the AO observed that since the tax on book profit u/s. 115JB of I.T. Act of Rs. 31,14,79,013/- is more than the tax on income as per normal provisions of the I.T. Act, assessed at Book Profit of Rs. 31,1....
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....ing disallowance of additional depreciation claimed for Rs. 1,02,12,533/- is not in order. 3.1 It is submitted by the Ld. AR that the appellant company is engaged in the manufacturing of iron and steel. It employs continuous process plant facilities for such manufacturing. The appellant company also has its captive power generation unit to generate and supply electricity to the plant as power constitutes a critical need in steel-and iron manufacturing operations. During the previous year the appellant company has set up a new wire rod mill at a cost of Rs. 36,29,13,887/-. The appellant company also incurred a further cost of Rs. 10,25,19,308/- on electrical installation for wire rod mill consisting of expenditure on control panels ....
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....ase laws of Mihir Textile Ltd. vs. CIT (2001) 252 ITR 686, Tribeni Tissues Ltd. (1994) 206 ITR 92 (Cal), CIT vs. Oswal Woollen Mills Ltd. (2007) 289 ITR 261 (P&H), CIT vs. Indian Turpentine and Rosin Co. Ltd. (1070) 75 ITR 533 (All) and of Ahmedabad Bench decision in Raw Flints (P) Ltd. vs. Income-tax Officer (1987) 21 ITD 207 which held that electrical installations are an integral part of manufacturing process and cannot be divorced from 'plant and machinery'. 3.2 I have considered the submissions made by the authorized representative of the appellant company. To my mind, the assessing officer should allow depreciation on electrical installations @ 15% by considering the same to be part of 'plant and machinery'. I....
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....T vs. Oswal Woollen Mills Ltd. 257 ITR 737 and CIT vs. Starlight Silk Mills P. Ltd. 280 ITR 257 the Hon'ble High Court has upheld the Tribunal's decision and hence, we are of the view that the electrical installations formed an integral part of the assessee's plant, therefore, depreciation was allowable at the rate applicable to plant and machinery. We are also of the considered view that electrical installation is integral to the plant and machinery used for manufacturing steel and as the Assessing Officer has not controverted the contentions of the assessee company hence, Ld. CIT(A) has rightly directed the AO to allow depreciation on electrical installations @ 15% i.e. the rate applicable to 'plant & machinery'. We furthe....