COMMISSIONER OF INCOME TAX Vs. KIRLOSKAR OIL ENGINES

JUDGEMENT

(1.) IN IT Ref. No. 18 of 1992 made under S. 256(1) of the IT Act, 1961, the Tribunal has referred the following question of law to this Court for opinion at the instance of the Revenue: "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the aircraft owned by the assessee falls under item E(1) of the Depreciation Table?" In IT Ref. No. 26 of 1992, the following question has been referred:

(2.) THE material facts giving rise to these references are as follows: The assessee is a public limited company engaged in the manufacture of diesel engines. During the previous year relevant to the assessment years under reference, the assessee owned an aircraft and used the same for its business. The assessee claimed depreciation thereon at the rate of 40 per cent on the ground that it fell within item E(1) of the Depreciation Table. The AO rejected the claim of the assessee and held that "aircraft" fell under item D(1) of the Depreciation Table and not under item E(1). On appeal by the assessee, the CIT(A) reversed the order of the AO and held that the aircraft owned by the assessee was covered by item E(1) of the Depreciation Table and the assessee was, therefore, entitled to depreciation in respect thereof at the rate of 40 per cent. The order of the CIT(A) having been affirmed by the Tribunal, the Revenue is before us by way of these references.

(3.) WE have carefully considered the rival submissions. To appreciate the same, it may be expedient to set out items D(1) and E(1) of the Depreciation Table which, at the material time, stood as follows: D(1) Aeroplanes Aircraft, aerial photographic apparatus (NESA) E(1) Aeroplanes Aero engines (NESA) A conjoint reading of these items makes it clear that the subject matter of the two items is quite different and distinct. Though both items are given under the heading "Aeroplanes", item D(1) prescribes the rates of depreciation on "Aircraft and aerial photographic apparatus", whereas item E(1) prescribes the rate of depreciation on "Aero engines".