Karnataka High Court
Commissioner Of Income-Tax vs Karnataka Power Corporation Ltd. on 30 January, 1991
Equivalent citations: [1994]205ITR511(KAR), [1994]205ITR511(KARN)
JUDGMENT K. Shivashankar Bhat, J.
1. The question referred to us under the provisions of the Income-tax Act, 1961, read thus :
"(1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in upholding the order of the Commissioner of Income-tax (Appeals) directing the Income-tax Officer to allow depreciation on approach roads at Sharavathi and Bhadra treating them as buildings ?
(2) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in upholding the order of the Commissioner of Income-tax (Appeals) directing the Income-tax Officer to allow the investment allowance on the generating station building treating it as 'plant' ?
(3) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in upholding the order of the Commissioner of Income-tax (Appeals) directing the Income-tax Officer to allow deduction under section 80J in respect of the 9th and 10th units commissioned by the assessee company ?"
2. The approach roads put up by the assessee were the subject matter for claiming depreciation. The Income-tax Officer disallowed this on the ground that the approach roads neither form part of the building not is there any specific provision for allowing depreciation on the roads. The Commissioner (Appeals) directed him to grant investment allowance treating the generating station building as "plant" and the Tribunal confirmed the Commissioner's order (sic). The first question arises out of the earlier facts. It will have to be answered in the affirmative and against the Revenue in view of the decision in CIT v. Bangalore Turf Club Ltd. .
3. The second question is self-contained regarding the facts in I.T.R.C. No. 131 of 1984 decided on January 7, 1991 (CIT v. Electronics Research Industries Pvt. Ltd. , wherein we have held that the internal telephone system is also plant and in which we have discussed the relevant principle. Applying the said decision, we have no hesitation to affirm the view expressed by the Appellate Tribunal. The generating station will have to be treated as a plant. The question will have to be answered in the affirmative and against the Revenue.
4. In respect of the two units referred to - 9th and 10th units - relief under section 80J was claimed. That was not allowed by the Income-tax Officer on the ground that no separate accounts had been maintained. The assessee produced relevant accounts before the Commissioner, and, consequently, the relief was granted in respect of the 9th unit. It was also established that the 10th unit was commissioned during the relevant year. In these circumstances, following the decision of this court in Ravi Machine Tools (P.) Ltd. v. CIT , the third question is answered in the affirmative and against the Revenue.
5. References answered accordingly.