2005 (6) TMI 18

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....rmination of lease is not recovered? (ii) Whether the Tribunal was right in law in exercising jurisdiction which results in enhancement of the assessment on the appellant when the Tribunal has no jurisdiction? (iii) Whether the Tribunal was right in holding that the depreciation on scaffolding material is not to be allowed at the rate of 100 per cent.?" We have heard learned counsel for the parties, and have perused the material on record. The assessee is a public limited company deriving income from property, finance and leasing business. The relevant assessment year is 1989-90. The assessee claimed depreciation on the scaffolding material given on lease to M/s. Bhasin Associates Ltd., New Delhi, at the rate of 100 per cent, on the gro....

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....penditure incurred on it had to be treated as such and there was no scope for working out depreciation under the proviso to section 32(1)(ii) by dissecting the electrical system into different component parts. In the instant case, the scaffolding material leased out by the assessee-company is found comprised mainly pipes, right angles and swivel clamps and fixed base plates. Thus, the various items comprising the scaffolding cannot be used independently of each other but form constituent parts of the entire scaffolding and act as a whole, i.e., an integrated unit. Thus, the scaffolding material being an integrated unit and one that is admittedly re-usable, there is no possibility of apportioning the expenditure to each item and allowing de....

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....t similar items that were leased out, though it is called lease, it appears to be sale. The income from leasing business shown by the assessee may be part of sale proceeds. However, the Department has treated it as capital asset and had allowed it depreciation at 33.33 per cent. It is therefore necessary to find out what transpired on the termination of the lease, i.e., whether the assessee was able to recover the entire scaffolding materials or recovered none. In the event of the assessee recovering nothing from the scaffolding materials it may go to indicate that there is a sale. If the assessee recovered the entire 100 per cent, scaffolding materials, then obviously it is a lease. In the event of finding that it is a real lease and the m....

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....002. In CIT v. Alagendran Finance Limited [2003] 264 ITR 269 (Mad) a Division Bench of this court has held that each centering sheet is eligible for 100 per cent, depreciation in view of the proviso to section 32(1)(ii) of the Act, since the cost did not exceed Rs. 5,000 per sheet. In our opinion, on the same basis it has to be held that each of the scaffolding materials would constitute "plant" as defined in section 43(3) of the Act. It may be mentioned that the definition of the word "plant" in section 43(3) of the Act is inclusive and not exhaustive, and hence it has to be given a wider meaning vide CIT v. Taj Mahal Hotel [1971] 82 ITR 44 (SC) and CIT v. Indian Turpentine & Rosin Co. Ltd. [1970] 75 ITR 533 (All). The word "plant" there....