Assessee
claimed depreciation on electric fittings @ 25% which was restricted by AO to
15% being the rate of depreciation on electrical fittings. CIT(A) allowed the
claim of depreciation @ 25%. On revenue’s appeal, Hon’ble ITAT observed that
the assessee is engaged in the business of running a multiplex theatre. The
electric fittings included equipment connected to projector and other film
exhibition systems. It was observed that Hon’ble Rajasthan High Court, in the
case of “CIT vs. RG Ispat Ltd. – 272 ITR 383”, has held that where a particular
structure is merely helpful in carrying on the activities of assessee, it may
not be a plant but if it is an integral part of plant and machinery or portion
of that building is an integral part of plant and machinery, then that should
be considered as plant in view of the Hon’ble Apex Court’s decision in the case
of “CIT vs. Karnataka Power Corporation – 247 ITR 268 (SC)”. In the assessee’s
case, electric fittings were essential part of the film exhibition and not
ancillary to its business. Without such electric items, the projector as well
as exhibition systems cannot be run. Hence, it was held that such electric
fittings were part and parcel of the plant & machinery and assessee was
entitled to depreciation @ 25%. Accordingly, Revenue’s appeal was dismissed.
[DCIT
vs. Anoli Holdings Pvt. Ltd. – ITA No.3175/Ahd/2010]
