1993 (7) TMI 56

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....e furnaces which were acquired in the earlier previous years calculated at the actual cost of these furnaces less depreciation ?" The assessee is engaged in manufacturing various types of glass. The assessee had purchased and put to use fire glass melting furnaces. Till the year relevant to the assessment year 1969-70, no depreciation was allowable on such furnaces and the expenditure on that account was treated as revenue expenditure. The Income-tax Rules came to be amended with effect from January 1, 1970, and as per the new depreciation rules, the whole of the cost of fire glass melting furnaces became eligible for depreciation. The assessee, therefore, during the assessment year 1970-71, claimed depreciation in respect of fire glass ....

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.... plant or machinery acquired in the earlier previous years and the Appellate Assistant Commissioner was in error in holding that 100 per cent. depreciation was allowable only if the asset was acquired in the previous year. The Tribunal, therefore, allowed the assessee's appeal. It appears that thereafter the Revenue moved the Tribunal for referring the aforesaid question to this court but did not meet with any success. It, therefore, approached this court under section 256(2) of the Act and on being directed by this court, the Tribunal has referred the above stated question to this court. What is contended by learned counsel for the Revenue is that till January 1, 1970, the expenditure which was incurred by the assessee on replacement....

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....ble rate of depreciation is shown as 100 per cent. of the written down value. Thus, from January 1, 1970, the depreciation became admissible on direct fire glass melting furnaces. It is an admitted position that in this case no depreciation was allowed earlier nor had the assessee claimed the expenditure incurred for replacement as allowable revenue expenditure. There is nothing in the relevant provision pertaining to depreciation to show that if machinery or plant is acquired before the previous year, no depreciation can be allowed in respect of such machinery or plant. On the contrary, the definition of written down value as contained in section 43(6) clearly indicates that even in the case of an asset acquired before the previous year....