15% Depreciation allowable to Stainless steel tables, Stools, etc used for production of vaccines: ITAT grants Relief to Serum Institute of India [Read Order]

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) has allowed the depreciation at 15 % to Serum Institute of India Ltd on products like Stainless steel tables, Stools, etc which are used for the production of vaccines.

The Assessing Officer found that the respondent-assessee company, treated the stainless steel tables, and stools trollies amounting to Rs.39,07,934/- used in the laboratory as Plant & Machinery and claimed depreciation at the rate applicable for Plant & Machinery.  The Assessing Officer thought that the same formed part of the furniture and allowed the depreciation at 10% as against 15% claimed by the respondent-assessee.

On appeal, the CIT(A), deleted the disallowance of depreciation of items of stainless steel tables, stools, and trollies used in the laboratory treating Plant & Machinery as against the treatment of these items as furniture items which was challenged by the revenue before the Tribunal.

Shri J. P. Chadraker appeared for the revenue and contended that the items of stainless steel table, stools, and trollies used in the laboratory cannot be classified as the Plant & Machinery and stated that these assets are allowable to depreciation rate applicable to furniture. On the other hand, Shri Percy Pardiwalla& Shri Sukh Sagar SyalCounsels appeared for the assessee and relied on the order of CIT(A).

A Coram of Shri Inturi Rama Rao, AM and Shri S SViswanethra Ravi, JM observed that the stainless steel tables, stools, and trollies were used in the laboratory i.e. for production and processing of chemical tests. 

The Tribunal viewed that the Bombay High Court in the case of CIT vs. Parke Devis, 214 ITR 587 (Bom.)held that “if the scientists or lab technicians used the said stainless steel tables, stools, trollies, racks as part of the production of vaccine and other should be classified as plant and machinery, accordingly, the depreciation should be allowed at the rate applicable to plant and machinery.”

The bench found no reason to interfere with the order of the CIT(A) and the appeal filed by the Revenue was dismissed.

To Read the full text of the Order CLICK HERE

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