C. Nagappan, J.
1. Both the appeals are filed under Section 260-A of the Income Tax Act, 1961 and they are directed against the common order of the Income Tax Appellate Tribunal, Madras, in I.T.A.Nos.370 and 560/MDS/1996, for the assessment years 1991-92 and 1992-93, dated 28.01.1999.
2. The appeals have been admitted to consider the following question of law.
'Whether on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that the assessee is entitled to 100% depreciation of centering sheets as per the provision to Section 32(1)(ii) of the Act on the ground that they are individual plants/ machineries?'
3. The respondent-assessee is a company, which is carrying on the business of leasing out its assets. It has purchased centering sheets during the assessment years 1991-92 and 1992-93 and claimed the costs of the centering sheets as deduction by way of 100% depreciation under the first proviso to Section 32(1)(ii) of the Income Tax Act on the ground that each centering sheet constitutes an individual plant/machinery costing far less than Rs.5000/-. The Assessing Officer held that each centering sheet is not an independent plant or machinery, since they are used in conjunction with the props to make a platform on which the reinforced concrete is laid and left to settle and dry and they cannot be used independently and the assessee is not entitled to 100% depreciation as claimed. On appeal by the assessee, the Commissioner of Income Tax (Appeals), Coimbatore, confirmed the order of the Assessing Officer. On further appeal, the Appellate Tribunal held that each centering sheet would constitute a plant and the assessee is entitled to depreciation as claimed and allowed the appeals. Aggrieved by the same, the Revenue has preferred the present appeals.
4. The only question is asto whether individual centering sheets can be regarded as plant for the purpose of first proviso to Section 32(1)(ii) of the Act.
5. The learned counsel for the appellant/revenue contended that the centering sheets are not used as independent units, but they are used collectively to make a platform on which reinforced concrete is laid and left to settle and dry and they are parts of a bigger unit used in building construction activity and therefore the assessee is not entitled to 100% depreciation and he relied on the decision of the Karnataka High Court in PATHANGE POULTRY FARM vs . COMMISSIONER OF INCOME-TAX - : [1994]210ITR668(KAR) . The question before the Court in that case was as to whether the assessee was entitled to 100% depreciation under Section 32 of the Income Tax Act on the cost of the cages purchased, on the ground that each cage was a separate plant valued less than Rs.750/-, when the cages were not separate but one continuous fabricated unit in which partitions were made for a number of birds to be housed in each compartment and the High Court held that cages were not used as independent units but were utilised by the assessee for fabrication of bigger compartments to have a large number of birds with common facilities of lighting, feeding, watering, etc. and they became a part of the bigger plant and they cannot be termed as plant to individually qualify for the depreciation allowance as claimed by the assessee. In the present case, centering sheets are separate sheets and hence the above decision does not apply.
6. The learned counsel for the revenue cited a decision of the Madhya Pradesh High Court in COMMISSIONER OF INCOME-TAX vs . SINGHANIA ENTERPRISES - : [1998]234ITR822(MP) , wherein, the assessee had claimed depreciation at 100% under Section 32 of the Income Tax Act on centering material and the revenue contended that each centering material could not be taken individually, but all the centering material put together, including scaffolding, constitute one plant and machinery and the High Court held that sufficient material was not before the Court in order to examine the question whether one or two plates of centering material would constitute a plant as a whole or not and it remanded the case to the Tribunal to determine that question.
7. A Division Bench decision of this Court in FIRST LEASING CO. OF INDIA LTD. vs . COMMISSIONER OF INCOME-TAX - : [2000]244ITR238(Mad) was brought to our notice, in which question arose asto whether individual bottles can be regarded as plant for the purpose of first proviso to Section 32(1)(ii) of the Act and this Court held that each bottle can be regarded as a plant and the assessee is entitled to claim 100% depreciation in respect of it, since its cost is less than Rs.750/-. R.Jayasimha Babu, J, speaking for the Bench, observed as follows.
'We do not see any foundation for such a view within the four corners of the proviso to section 32(1)(ii) of the Act. The benefit of the proviso is not confined only to units in bulk where the cost of each unit is less than Rs.750. The proviso would be rendered futile if all similar units of plant, the individual value of which is Rs.750 are to be grouped together and taken as one single unit for the purpose of calculating depreciation. The proviso does not refer to the number of units but refers to the value of the individual unit and once it is found that the value of the individual unit which could be regarded as a plant, is below Rs.750/- it would qualify for 100 per cent depreciation as provided in the proviso.
The task of determining the circumstances in which the proviso is applicable is thus quite simple. One has to first identify the plant or machinery. If the asset claimed by the assessee as plant and machinery is found to be such, the only question to be answered thereafter is as to the value thereof. If the value is below Rs.750 the proviso will apply. There is no need or occasion for raising a further question as to how many numbers of such units were bought by the assessee at a time or in the course of the year or how many such units are normally used by the assessee for his business, or how many such units are normally regarded as the tradable bulk by the manufacturers of such units. The functional test to the extent relevant is only for the purpose of ascertaining the usability of that unit as a plant or machinery by itself without being dependent on other similar units for making it functional.'
8. As observed, the benefit of proviso to section 32(1)(ii) of the Act is not confined only to units in bulk and it does not refer to the number of units , but refers to the value of individual units and if the individual unit is regarded as a plant and if it is valued below Rs.5,000/-, it would qualify for 100% depreciation. There is no question of how many units are normally used for the business and the test is asto whether one centering sheet can be identified as a plant or machinery. While erecting scaffoldings for a building, centering sheets are usually arranged in different shapes and sizes and a single sheet also is used for a particular work. It is not, as a matter of rule, centering sheets have to be used collectively for all works. Depending upon the nature of work, the number of centering sheets to be used varies. A single individual centering sheet may be sufficient for a particular work in the process of construction of a building and hence it would constitute a plant and if the value of it is less than Rs.5000/-, the assessee is entitled to claim 100% depreciation as per the proviso to Section 32(1)(ii) of the Act.
9. The learned senior counsel for the respondent/assessee contended that the finding of the Tribunal is on question of fact and no substantial question of law is involved for adjudication and relied on the decision of Andhra Pradesh High Court in COMMISSIONER OF INCOME-TAX vs. SREE RAMA AGRICULTURAL POULTRY FARM -1258 ITR 336. It is true that the finding recorded by the Appellate Tribunal that each centering sheet is a plant is essentially on a question of fact and the Tribunal is the final fact finding authority. However we have elucidated on the issue on merits in view of the importance of the question involved.
10. The Appeals are accordingly dismissed. No costs.