GURINDER SINGH KAIRON Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) AT the instance of the assessee, the Tribunal, Amritsar Bench, Amritsar (hereinafter referred to as the Tribunal) has referred the following question of law to this Court for its opinion: Whether, on the facts and in the circumstances of the case, the Tribunal was justified in allowing depreciation on ice factory machinery at 10 per cent and not at 15 per cent as claimed by the assessee?

(2.) FOR the asst. yr. 1978-79 ending 31st March, 1978, assessee filed his return showing an income of Rs. 19,220. The ITO passed the order under S. 143(3) of the IT Act, 1961. On the ice factory machinery, ITO allowed depreciation at the rate of 10 per cent whereas assessee claimed depreciation at the rate of 15 per cent. In view of this, depreciation at Rs. 33,378 was allowed on the written down value of the ice factory machinery of Rs. 3,33,781. The AAC confirmed the order of ITO and found that there was no special rate provided for ice factory machinery and, therefore, depreciation at the rate of 10 per cent was admissible. Assessee filed further appeal before the Tribunal. Assessee relied upon a judgment of this Court in CIT vs. Gurinder Singh Kairon (1982) 23 CTR (P&H) 8 : (1982) 133 ITR 300 (P&H) : TC 27R.468, in the case of assessee himself for the asst. yr. 1970-71 to contend that he was entitled to depreciation at the rate of 15 per cent. In that case CIT had come in reference against the order of the Tribunal allowing depreciation to the assessee at the rate of 15 per cent. On interpretation of the same provisions, High Court had held that assessee was entitled to depreciation at the rate of 15 per cent on the ice factory machinery. Tribunal did not accept the contention of the assessee and relying upon its decision for the asst. yr. 1974-75 held that depreciation allowable would be at the rate of 10 per cent and not 15 per cent on the ice factory machinery. Tribunal referred to Item 13 of Appendix I Part III (ii) of the IT Rules, 1962 (hereinafter referred to as the Rules) which reads as "Refrigeration plant containers, etc. (other than racks)". Tribunal held that depreciation of 15 per cent was allowable on "Refrigeration plant containers" and not on the "Refrigeration plant". It was held that "Refrigeration plant container" is a different item and could not be considered as a "Refrigeration Plant and container". Tribunal, therefore, did not follow the decision of this Court rendered for the asst. yr. 1970-71 and allowed depreciation at the rate of 10 per cent on the ice factory plant. Tribunal distinguished Gurinder Singh Kairon's case (supra) by observing that the only question before the High Court in that case was whether the refrigeration plant was the same thing as the ice factory machinery and that the question decided in that case was not the same as in the present case.

(3.) COUNSEL for the assessee contended that the case of the assessee is squarely covered by the earlier decision of this Court whereas the counsel for the Revenue contended that the entry in the relevant rule was "Refrigeration plant containers, (other than racks)" and not the "Refrigeration plant" and, therefore, depreciation was not admissible at the rate of 15 per cent; that on general machinery and plant only 10 per cent depreciation was admissible and the special rate of 15 per cent was applicable to specified items. The case of the assessee did not fall in the specified item. It was also contended that the relevant provision of the rules was not brought to the notice of the Bench hearing the petition.