Depreciation on electric fittings which are integral part of plant and machinery can be claimed at @25%
D.R. relied upon the order of the A.O. and argued that as per Rule, on electric item depreciation is allowable @ 15%. Therefore, he requested to confirm the order of the A.O. At the outset, ld. A.R. argued that the assessee is engaged in the business of running a multiplex theatre. The cost of electric fittings and equipments amounting to Rs.59,48,760/-. The electric fittings are engaged for running the projector and film exhibition systems. Thus, the electric fittings and equipments are apparently in the nature of apparatus or plant which is essential for carrying on the main business activity of the assessee. The various High Courts have held that depreciation on items as per Rule are less but are used or fitted with the main plant and machinery and are integral part of the very plant and machinery for carrying on the business activity, the higher depreciation can be allowed. He relied upon the decision of Hon’ble Supreme Court in case of CIT vs. Karnataka Power Corporation, 243 ITR 81, wherein Hon’ble Supreme Court applied the functional test in this case on building which is specially designed and equipped to function as a Nursing Home constituted a plant for the purpose of depreciation. Therefore, he prayed to confirm the order of CIT(A).
We have heard the rival contentions and perused the material on record. It is undisputed thatelectrical items are fitted with projector and other film exhibition systems. Withoutelectrical items, the projector as well as exhibition systems cannot be run. Therefore, it is a part and parcel of the plant and machinery. Thus, the assessee is entitled to higher rate @ 25%. We confirm the order of the CIT(A) and dismiss the Revenue’s appeal on this ground.