PATHANGE POULTRY FARM Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) THE Income -tax Appellate Tribunal, Bangalore, has referred to us the following two questions for our opinion in terms of section 256(1) of the Income -tax Act, 1961 :

(2.) BEFORE we address ourselves to the legal position on the subject, a few facts relevant to the disposal of this reference may first be noticed

(3.) IT has, for that purpose, raised sheds and installed cages in the same for housing birds. During the period relevant to the assessment year 1981 -82, the assessee added some new sheds to the existing ones and purchased 9,000 cages at the rate of Rs. 15 per cage for installation in these sheds. In the income -tax return filed by the assessee for the relevant year, it claimed 100 per cent. depreciation on the cost of the cages purchased on the ground that each cage was a separate plant whose value being less than Rs. 750, the same qualified for 100 per cent. depreciation under section 32 of the Income -tax Act. The assessee's claim was disallowed by the Income -tax Officer on the ground that the so -called cages were not separate but one continuous fabricated unit in which partitions are made for a number of birds to be enclosed in each compartment. The Income -tax Officer held that the cages purchased by the assessee did not have a separate existence apart from the bigger unit which consisted of hundreds of such cases and that the cost of each such unit being more than Rs. 750 only ten per cent. depreciation was allowable on the cost of the additions made.