JUDGMENT Prakash Krishna, J.
1. The Income Tax Appellate Tribunal, Allahabad has referred the following question of law for the opinion of the Court, under Section 256(1) of the Income Tax Act, 1961, hereinafter referred to as the Act.
"Whether on facts and circumstances of the case, the Income Tax Appellate Tribunal was justified to hold that depreciation on machinery used in an ice factory is admissible at the rate of 15%?"
2. Assessment year 1977-78 is involved. The assessee/respondent is a limited company and it derives income from sale of ice and medicines. The only issue relates to the rate of depreciation allowable on ice manufacturing machinery. It was allowed at the rate of 5% by the I.T.O. on the ground that the machinery used in ice factory consisted mainly condensers. This order was modified by the CIT (Appeals). It allowed the depreciation at the rate of 10% as admissible to the general machinery. He was of the view that the machinery of ice factory is not specified separately in the depreciation Schedule in the Income Tax Rules 1962. The Tribunal has held that the depreciation at the rate of 15% was allowable to the assessee on the ice factory.
3. Heard Shri A.N. Mahajan, learned Standing Counsel for the Revenue. Nobody appeared for the assessee.
4. The Tribunal followed the decision of Punjab & Haryana High Court in the case of CIT v. Gurinder Singh Karion (1982) Vol. 133 ITR 300. The Punjab and Haryana High Court has held that the ice plant machinery's depreciation is allowable at the rate of 15%. It has placed reliance upon the relevant portion mentioned in Encyclopedia Britannica, Volume 19 page 63, which is as follows :-
"The refrigeration technology draws its basic knowledge from three inter related yet distinct areas of science, namely, thermodynamics, heat transfer and fluid flow. As refrigeration technology has advanced improved process and materials have made possible many consumer products and industrial applications, from kitchen refrigerators and ice cube makers to spot - cooling of electronic devices and simulating Artic conditions for testing and research."
5. Thereafter it concluded that the assessee was entitled to the depreciation at the rate of 15%. Learned Standing Counsel has placed reliance upon Appendix-1 Part I, which prescribes the rate of depreciation. Item No. III of the said Appendix provides depreciation on machinery and plant (not being a ship). He submitted that the machinery and plant (not being ship) for which no special rate has been prescribed, the depreciation at the rate of 15% is allowable only with respect to such plants and machineries as specified under Category 'B" of Item No. III. On a careful reading of the various plants and machineries enumerated therein, we do not find the mention of ice factory machinery. Unless the item is specifically mentioned or it can be shown that it falls in any of the plants and machineries mentioned therein the depreciation at the rate of 15% is not allowable. The higher depreciation at the rate of 15% is allowable only in respect of the plants and machineries specified in the "rates of depreciation". It has not been held by Punjab and Haryana High Court in the aforesaid judgment that the ice factory machinery falls in the ambit of any of the machinery or plants enumerated under Part 3 of the aforesaid list.
6. We respectfully dissent with the view of the Punjab and Haryana High Court.
7. In the result we are of the opinion that the depreciation at the rate of 10% allowable to the ice factory machinery and the Tribunal was wrong in granting depreciation at the rate of 15%. The Tribunal was not correct in allowing depreciation at the rate of 15%. We accordingly answer the above question in negative i.e. in favour of the department and against the assessee.