COMMISSIONER OF INCOME TAX vs. SAURASHTRA BOTTLING P LTD

Whether the Appellate Tribunal is right in law and on facts in directing the ITO to allow 100% depreciation on the cost of bottles and wooden shells ?"

The assessee claimed before the I.T.O. that the containers consisting of bottles and crates constituted "plant" within the meaning of section 43(3) of the Act and since the cost of each bottle and crate was less than Rs. 750/-, 100% depreciation was allowable for each container. The I.T.O. rejected the claim of the assessee. The C.I.T. (Appeals) however accepted it. The Tribunal dismissed the appeal of the Revenue. The question whether bottles and crates used by the assessee who was doing the business of manufacturing and selling soft drinks were eligible for depreciation allowances under section 32(1)(ii) of the Act was decided by us in I.T.R. No. 206 of 1985 on 13.2. 98. We have taken the view that bottles and crates of the assesee which were used for its business were "plant" and therefore, the assessee could claim depreciation under section 32(1)(ii) of the Act. Since the facts and points involved are same, we do not reproduce the facts from the record. Following our decision in I.T.R. no.206 of 1985, we hold that bottles and containers used by the assessee constitute "plant" and the entire purchase price thereof was allowable as depreciation under section 32(1)(ii) of the Act. The question referred to us is therefore, answered in the affirmative in favour of the assessee and against the Revenue. The Reference stands disposed of accordingly with no order as to costs.