Commissioner Of Income Tax-I, Chennai v. M/S.upasana Finance Limited

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 06.02.2006 Coram : THE HONOURABLE MR.JUSTICE P.D.DINAKARAN AND THE HONOURABLE MR.JUSTICE P.P.S.JANARTHANA RAJA Tax Case (Appeal) No.463 of 2004 Commissioner of Income Tax-I,Chennai. ..AppellantVs M/s.Upasana Finance Limited,96/1, Luz Church Road,Mylapore, Chennai-600 004. ..Respondent8Appeals under Section 260A of the Income Tax Act, 1961against the order of the Income Tax Appellate Tribunal,Madras, 'B' Bench dated 04.12.2003 in I.T.A. No.1141/Mds/97for the assessment year 1993-94. against the order ofCommissioner of Income Tax (Appeals IV) Madras dated28.02.1997 and made in IT/WT/GT/Appeal No. ITA 52/96-97.against the order of the Deputy Commissioner of Income TaxSpecial Range XI, Madras 600 034 dated 28.02.1996 and madein PAN/GIR NO. 47-081/CQ-5987 For Appellant : Mrs.Pushya SitaramanFor Respondent : Mr.D.S.Suman (Judgment of the Court was delivered by P.P.S.JanarthanaRaja, J.) The present appeal is filed under Section 260A of theIncome Tax Act, 1961 by the Revenue, in I.T.A.No.1141/Mds/97, passed by the Income Tax AppellateTribunal, Madras, 'B' Bench raising the followingsubstantial question of law. "Whether in the facts and circumstancesof the case, the Tribunal was right inallowing 100% depreciation on printingcylinders, sintex sipper ice box, ms https://hcservices.ecourts.gov.in/hcservices/ bins which does not serve any purposeindividually?" 2.The brief facts leading to the above question oflaw are as under: i)The assessee is engaged in the business of hirepurchase, finance and leasing etc. The Return of thecompany's income was filed on 30.12.1993. During thecourse of the assessment under Section 143(3), theAssessing Officer disallowed the depreciation which wasclaimed by the assessee at the rate of 100% on printingcylinders, MS bins and Shipper Sintex Ice Boxes under firstproviso to Section 32(1) of the Act, by giving the reasonthat the assessee was a leasing company and had leased theassets in bulk . ii)Aggrieved by the order of the above, the assesseefiled an appeal before the first appellate authority. Thefirst appellate authority held that, each one of theprinting cylinders, MS bins and Shipper Sintex Ice Boxeswas a plant and was qualified for 100% depreciation.Aggrieved by the order, the Revenue filed an appeal beforethe Income Tax Appellate Tribunal. The Income TaxAppellate Tribunal dismissed the Revenue's appeal and heldthat the assessee was entitled for 100% depreciation on thesaid item. The learned counsel appearing for the Revenuesubmitted that the assessee had leased the assets in bulkand not single item-wise, and hence, the depreciation of100% was not allowable. The counsel for the respondentsubmitted that the assessee is entitled for 100%depreciation on the ground that each piece of asset costsless than Rs.5,000/- 3.We heard the learned counsel. It was found bythe Tribunal that the cost of each asset was not higherthan Rs.5,000/-. The printing cylinders are mainly used inthe printing industry and the matter to be printed arescrewed on to these cylinders and then prints are taken.Therefore these printing cylinders were being used as partof the plant. The MS bins are being used as individualitem and each one of them is a plant as a single unit. Thesame is the case for Shippers Sintex Ice Boxes, as ShippersSintex Ice Boxes are of different capacities and are usedindividually as per the requirements. So, each of theseassets is a plant. In the case of First Leasing Co. ofIndia Limited Vs. C.I.T., reported in 244 ITR 238, it isheld that "each bottle was an independent unit and was notdependent for its user on the availability of other bottleswhether empty or filled. The use of one bottle was not interconnected with the use of another bottles. Since eachbottle was an individual unit and all bottles together didnot constitute a single integrated unit, depreciation underthe proviso to Section 32(1) (ii) of the Act wasallowable." Another Division Bench of this Court hadconsidered the above judgment and held the same view, inthe case of C.I.T. Vs. Alagendran Finance Ltd reported in264 ITR 269. So, we are of the view that depreciation of100% on printing cylinders, MS bins and Shippers Sintex IceBoxes are eligible under the first proviso to Section 32(1)(ii) of the Act, and each of these assets is a plantindividually. 4.In the foregoing conclusions, we find no error inthe order of the Income Tax Appellate Tribunal and requiresno interference. Accordingly, the above tax case isdismissed. No costs.kmSd/Asst.Registrar/true copy/Sub Asst.RegistrartOThe Assistant Registrar,Income Tax Appellate TribunalIIIrd Floor, Rajaji bhavanBesant Nagar, Madras 600 090. 2. The Commissioner of Income Tax - IChennai - 34 3. The Commissioner of Income Tax (Appeals) - IVMadras 34 4. The Deputy Commissioner of Income-Tax, Special Range XIMadras 600 034.+ one cc to M/s. Pushya Sitaraman, Advo ate sr no 5115+ one cc to Mr. P.S. Suman, Advocate sr no. 4996PV(CO)NM(13.03.2006) Tax Case (Appeal) No.463 of 2004