Arijit Pasayat, C.J.@mdashAt the instance of the Revenue, the following question has been referred for the opinion of this court u/s 256(1) of the
Income Tax Act, 1961 (for short the ""Act""), by the Income Tax Appellate Tribunal, Delhi Bench ""E"", New Delhi (for short the ""Tribunal"") :
Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was correct in law in upholding the decision of the
Commissioner of Income Tax (Appeals) directing the Income Tax Officer to allow depreciation on Rs. 9,00,225 of project report ?
2. The dispute relates to the assessment year 1975-76 for which the previous year ended on September 30, 1974. The assessed claimed
depreciation on the value of the project report of Rs. 9,00,225. The Income Tax Officer disallowed the claim on the ground that the project report
was only a preliminary report which could not be said to form any drawing or specification or manufacturing technique. It was further observed that
expenditure in question had been shown in lump without any details and since the details were not there it would not be possible to hold that any
asset had come into existence. The matter was carried in appeal before the Commissioner of Income Tax (Appeals) (for short the ""CIT (A)""). The
said authority with reference to the agreement in question came to hold that the detailed project report was encompassed by the expression ""plant
as defined in Section 43(3) of the Act. The matter was carried in further appeal before the Tribunal by the Revenue. The Tribunal upheld the views
of the Commissioner of Income Tax (Appeals). On being moved for a reference, the question as set out above has been referred for the opinion of
this court.
3. We have heard learned counsel for the Revenue. There is no appearance on behalf of the assessed in spite of notice. The meaning of the
expression ""plant"" was examined by the apex court in various cases, in particular in Scientific Engineering House (P) Ltd. Vs. Commissioner of
Income Tax, Andhra Pradesh, . It was held that ""documentation service"" comprised of drawings, designs, charts, plans, processing data and other
literature, etc., and can be treated as ""plant"" and depreciation can be allowed thereon. That being the position, an obvious answer to the question is
in the affirmative, in favor of the assessed and against the Revenue. The reference stands disposed of.
