Bombay H.C : Whether, on the facts and in the circumstances of the case, the capital expenditure incurred by the assessee-company of Rs. 6,00,000 and of Rs. 24,54,303 in terms of the ‘Polysterene Plant Contract’ of January 18, 1956, read with the agreement of September 20, 1955, and Dow Styrene Process Plant agreement of August 15, 1960, respectively, resulted in its acquiring a ‘plant’ as defined in s. 43(3) of the IT Act, 1961, on which depreciation is properly allowable under s. 32(1) (ii) of the said Act for each of the asst. yrs. 1967-68 to 1970-71 both inclusive ?

High Court Of Bombay

CIT vs. Polychem Ltd.

Sections 32(1)(ii), 43(3)

Asst. Year 1967-68, 1968-69, 1969-70, 1970-71

S.P. Bharucha & T.D. Sugla, JJ.

IT Ref. No. 89 of 1976

18th November, 1988

Counsel Appeared
G.S. Jetly, Mrs. M. Singh & K.C. Sidhwa, for the Revenue : S.J. Mehta & I. M. Munim, for the AssesseeT.D. SUGLA, J. :

This reference at the instance of the Department raises the following question: “Whether, on the facts and in the circumstances of the case, the capital expenditure incurred by the assessee-company of Rs. 6,00,000 and of Rs. 24,54,303 in terms of the ‘Polysterene Plant Contract’ of January 18, 1956, read with the agreement of September 20, 1955, and Dow Styrene Process Plant agreement of August 15, 1960, respectively, resulted in its acquiring a ‘plant’ as defined in s. 43(3) of the IT Act, 1961, on which depreciation is properly allowable under s. 32(1) (ii) of the said Act for each of the asst. yrs. 1967-68 to 1970-71 both inclusive ?”

2. Counsel are agreed that the issue involved herein is squarely covered by the Supreme Court decision in the case of Scientific Engineering House Pvt. Ltd. vs. CIT (1985) 49 CTR (SC) 386 : (1986) 157 ITR 86, and that the question has to be answered in the affirmative and in favour of the assessee.

3. The question is, accordingly, answered.

No order as to costs.

[Citation : 176 ITR 333]

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