- (1.) The appeal is directed against a judgment and order dated March 30, 2001, passed by the learned Appellate Tribunal. Aggrieved by the order, the Revenue has come up in appeal which was admitted by an order dated April 4, 2003. Three several questions of law were formulated. The first question reads as follows: (1) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in law in holding that vibro bed dryer is an item covered under Appendix 1 III(3)(iii)A of the Income-tax Rules, 1962, and is entitled for 100 per cent, depreciation? Mr. Bhowmick, learned advocate appearing for the Revenue, drew our attention to the Schedule appearing in the Appendix to the Income-tax Rules, 1962, and wanted to impress upon us that vibro bed dryer is not an energy saving device as per the aforesaid Schedule and, therefore, 100 per cent, depreciation could not have been permitted. Mr. Bagaria, learned advocate appearing for the assessee, drew our attention to item No. 3C of the Schedule applicable to "waste heat recovery equipment". He submitted that there is a clear finding that the consumption of electricity was reduced by 40 per cent. Therefore, the instrument in question is eligible for 100 per cent, depreciation. He in support of his submission relied on an earlier judgment of the Tribunal in the case of Deputy CIT v. Assam Brook Ltd. in I.T.A. No. 370 (Cal) of 1990, wherein the learned Tribunal allowed 100 per cent depreciation in the case of identical instrument. It appears from the said judgment that the aforesaid view was taken by the learned Tribunal following the earlier views expressed in the case of Warren Tea Ltd. in I.T.A. No. 193 (Cal) of 1990. Mr. Bhowmick replied by stating that the Schedule on a plain reading does not appear to cover an equipment which is merely energy efficient. It applies only to those items installed for the purpose of saving consumption of energy. Mr. Bhowmick may be correct but we express no opinion with regard thereto. The judgment in the case of Assam Brook Ltd. was rendered by the learned Tribunal after taking into consideration/the views of experts recorded by the learned Tribunal which are as follows: It is seen from the records that the kilnburn vibro fluid bed dryer is a waste heat recovery equipment and is also energy economiser enabling a saving of over 40 per cent, as compared to conventional dryer. This is the opinion of the experts which has to be accepted in the absence of any findings to the contrary by the Assessing Officer.
(2.) From the aforesaid views of the Tribunal it appears that energy efficient instrument was considered to fall within the relevant entry of this Schedule and, therefore, 100 per cent, depreciation was allowed. The question is a mixed question of fact and law. The Department at the appropriate stage did not try to lead any evidence to show that the instrument in question cannot be brought within entry 3B or entry 3C of the Schedule. We are as such unable to find any fault with the views expressed by the Tribunal. Accordingly, the first question is answered in the affirmative and in favour of the assessee.
(3.) The second question formulated in this case reads as follows: (2) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in law in holding that valuation of closing stock is to be made ignoring the amount of cess paid when the same was debited, and the net effect will be nil on deduction of the same has to be allowed from the income of the next year?;