1985 (2) TMI 71

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....nd testing. The main clients of the assessee were shipping cargo and shipping agents. In the accounting year relevant to the assessment year 1979-80, the assessee had purchased 3 ship models for Rs. 70,000 and those models were displayed in the business premises of the assessee. The assessee claimed depreciation on the ground that those ship models constituted 'plant'. The alternate claim of the assessee was that those ship models constituted 'furniture' and, as such, depreciation was admissible. 2. The ITO rejected the claim of the assessee. According to the ITO, those ship models were neither 'plant' nor 'furniture' and as such, no depreciation was admissible. The Commissioner (Appeals) upheld the order of the ITO. The assessee has now....

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...., inter alia, as follows : "Movable articles in a dwelling house, place of business, or a public building." It would, thus, appear that all articles of convenience or decoration used for the purpose of furnishing a place of business or an office are articles of furniture. In the present case, the three ship models have been kept in the office premises of the assessee as show-pieces to decorate those premises. The ship models have direct connection with the business of the assessee. They represented symbols pertaining to the assessee's business and had commercial use. In the circumstances, having regard to the various meanings referred to above, we hold that those ship models should be treated as 'furniture' owned and used by the asses....

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....t been put to use and they do not tend to depreciation in value as compared to other assets. This reason is equally untenable. It cannot be said that the ship models have not been put to use. The office premises stand furnished by these ship models. It is also not correct to say that they would not depreciate in value by passage of time. Further observation of the ITO that depreciation was not allowable because the value of these ship models would increase by passage of time from the point of view of antiquity is equally without merit. The depreciation allowance is a statutory allowance not confined expressly to diminution in value of the asset by reason of wear and tear. The said allowance can be claimed if the asset in question is shown t....