| Case ID |
e2d27f31-1593-4030-811f-3946be2e5326 |
| Body |
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| Case Number |
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| Decision Date |
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| Hearing Date |
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| Decision |
The Tribunal held that depreciation on the moulds used for manufacturing electric poles was allowable at ten percent. The assessment years in question were from 1977-78 to 1982-83. The Income-tax Officer initially allowed a higher depreciation rate but later corrected it. The Commissioner (Appeals) initially favored the assessee by allowing thirty percent depreciation, but this was overturned by the Tribunal, which concluded that the relevant clauses of the Income-tax Rules did not apply to the moulds used for poles. The conclusion was that neither clause IIID(2) nor clause IIID(10) of Part I of Appendix I of the Income-tax Rules covered the moulds for poles, thereby limiting the allowable depreciation to ten percent. |
| Summary |
In the case of Frontier Engg. (Prestressed Concrete) P. Ltd. v. Commissioner of Income Tax, the Gauhati High Court addressed the issue of depreciation rates applicable to moulds used in the manufacture of electric poles. The Income-tax Act, 1961, specifically Section 32, was scrutinized to determine the appropriate depreciation allowance for the assessment years 1977-78 to 1982-83. The Income-tax Officer initially granted a thirty percent depreciation rate on the moulds but later amended this to ten percent, which was contested by the assessee. The Commissioner (Appeals) sided with the petitioner, citing similarities between concrete pipes and poles, thus allowing a thirty percent rate. However, the Tribunal reversed this decision, affirming the Income-tax Officer's correction. The Court concluded that the relevant provisions for moulds specifically pertained to pipes and did not extend to poles, affirming the ten percent rate as the correct allowance. This case underscores the importance of precise definitions in tax law and the interpretation of rules regarding asset depreciation. |
| Court |
Gauhati High Court
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| Entities Involved |
Commissioner of Income Tax,
Frontier Engg. (Prestressed Concrete) P. Ltd.
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| Judges |
A. Raghuvir, C.J.,
Dr. B.P. Saraf, J.
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| Lawyers |
J.P. Bhattacharjee,
Miss U. Baruah,
S.S. Goswami,
D.N. Choudhury,
K.H. Choudhury
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| Petitioners |
Frontier Engg. (Prestressed Concrete) P. Ltd.
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| Respondents |
Commissioner of Income Tax
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| Citations |
1991 SLD 1949 = (1991) 191 ITR 416
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| Other Citations |
Indian Carbon Ltd. v. CIT [1988] 2 GLR 341 (Gauhati)
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| Laws Involved |
Income-tax Act, 1961
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| Sections |
32
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