COMMISSIONER OF INCOME TAX LUDHIANA vs. M/S PURE DRINKS NEW DELHI

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ITR/231233/1999HC Punjab & HaryanaPHHC01038697199923 November 2006Author: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE RAJESH BINDAL2 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that the ITAT was right in law in concluding that bottles and shells constitute 'Plant' for the assessee company, thereby entitling them to 100% depreciation under the proviso to Section 32(1)(ii) of the Income Tax Act, 1961. The Court's reasoning was based on its prior decision in I.T.R. No.82 of 1988 – The Commissioner of Income Tax, Patiala Vs. M/s Pure Drinks (P) Ltd. Delhi, where a similar issue was decided against the revenue. The ratio decidendi is that if bottles and shells are considered 'Plant' by the ITAT, and this finding is not disputed by the revenue in light of a binding precedent, then the depreciation claim is valid. The question of law is answered in favour of the assessee and against the revenue. No specific operative directions are mentioned beyond answering the reference.

What were the facts?

This case involves a reference of a question of law to the High Court of Punjab and Haryana at Chandigarh, arising from an order of the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench. The assessment years in question are 1980-81 and 1983-84. The petitioner is the Commissioner of Income-tax (Central), Ludhiana, and the respondent is Pure Drinks (Bombay & Calcutta), New Delhi. The dispute concerns whether bottles and shells used by the assessee company qualify as 'Plant' for the purpose of claiming 100% depreciation under the proviso to Section 32(1)(ii) of the Income Tax Act, 1961. The ITAT had ruled in favour of the assessee.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the ITAT was right in law in holding that the Bottles and Shells constitute 'Plant' in the case of the assessee company and as such are entitled to 100% depreciation under the proviso to Section 32(1)(ii) of the Income Tax Act, 1961? Assessee's Contention: The judgment does not record any specific arguments made by the assessee before the High Court. However, the ITAT's decision in favour of the assessee implies that they argued bottles and shells qualify as 'Plant' and are eligible for 100% depreciation. Revenue's Contention: The revenue's counsel did not dispute the issue referred to the High Court, acknowledging that a similar issue had been decided against the revenue by this Court in a previous case.

Which sections of the Income-tax Act were involved?

Section 32(1)(ii)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

**** I.T.R. No.231-233 of 1999 Date of Decision:23.11.2006 Commissioner of Income-tax (Central), Ludhiana .....Petitioner Vs. Pure Drinks (Bombay & Calcutta), New Delhi

.....Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE RAJESH BINDAL Present:- Mr. S.K.Garg Narwana, Advocate for the petitioner. Mr. Akshay Bhan, Advocate for the respondent. **** ADARSH KUMAR GOEL, J. The following question of law has been referred for opinion of this Court arising out of order passed by the Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh in I.T.A. Nos.1324 to 1326/Chandi/88 dated 21.5.1993 in respect of assessment years 1980-81 and 1983-84:- “Whether on the facts and in the circumstances of the case, the ITAT was right in law in holding that the Bottles and Shells constitute `Plant' in the case of assessee company and as such entitled to 100% depreciation under the proviso to section 32(1) (ii) of the I.T. Act 1961?” Learned counsel for the revenue does not dispute that issue referred to above has been decided against the revenue vide order of this Court dated 19.4.2006 in I.T.R. No.82 of 1988 – The Commissioner of Income Tax, Patiala Vs. M/s Pure Drinks (P) Ltd. Delhi. In view of the above, the question referred to above is answered against the revenue and in favour of the assessee.

( ADARSH KUMAR GOEL ) JUDGE November 23, 2006 ( RAJESH BINDAL )

renu JUDGE

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