MODERN DENIM LTD V. COMMISSIONER OF INCOME TAX JAI

ITA/55/2006

AI Insights

The case involves Modern Denim Ltd., which appealed against the decision of the Income Tax Appellate Tribunal (ITAT) that denied 100% depreciation on certain machinery, including a dyeing machine and boiler, claiming they were not energy-saving devices. The appellant argued that these machines, being energy-efficient and integral to the dyeing process, should qualify for 100% depreciation under the Income Tax Rules. The High Court examined the definitions and interpretations of 'energy-saving devices' and the integration of the boiler with the dyeing machine, ultimately siding with the appellant based on precedents and the functional interdependence of the machinery.

• Counselvise Citation: [2017] 140 COUNSELVISE.COM (IT) 750960 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 09-05-2017
• Assessment Year: misc
• Other Referred Cases: M/s. Industrial Development Corporation of Orissa Ltd. vs. Commissioner of Income Tax & Ors., Dy. Commissioner of Income Tax, Special Range-2 vs. Vippy Solvex Products Ltd., The Commissioner of Income Tax vs. Adar Tea Products Company
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: R B MATHUR
• Assessee Lawyers: SUNIL NATH; SANDEEP TANEJA; ARCHIT BOHRA
• Keywords: Boiler; Depreciation; Energy saving device; Thermally efficient; Automatic switch off; Dyeing machine
• Section: 143(2); 43B; 143(1)(a)

Judgement Text

"HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 55 / 2006 Modern Denim Ltd. Having Its Registered Office At A-4 Vijay Path, Tilak Nagar, Jaipur. ----Appellant Versus 1. Commissioner of Income Tax-II, Jaipur New Central Revenue Building Statue Circle, Jaipur. 2. Joint Commissioner of Income Tax, Special Range-I Jaipur. ----Respondents Connected With D.B. Income Tax Appeal No. 464 / 2008 Modern Denim Ltd. Having Its Registered Office At A-4 Vijay Path, Tilak Nagar, Jaipur. ----Appellant Versus Deputy Commissioner of Income Tax, Circle-6, New Central Revenue Building Statue Circle, Jaipur. ----Respondent D.B. Income Tax Appeal No. 53 / 2011 Modern Denim Ltd. Having Its Registered Office At A-4 Vijay Path, Tilak Nagar, Jaipur. ----Appellant Versus Deputy Commissioner of Income Tax, Circle-6, New Central Revenue Building Statue Circle, Jaipur. ----Respondent _____________________________________________________ For Appellant(s) : Mr. Sunil Nath, Mr. Sandeep Taneja & Mr. Archit Bohra For Respondent(s) : Mr. R.B. Mathur _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYAS Judgment (2 of 17) [ITA-55/2006] Per Hon’ble Jhaveri, J. 09/05/2017 1. By way of these appeals, the appellant has challenged the judgment and order of the Tribunal whereby the Tribunal has dismissed the appeal of the department as well as the assessee. 2. This Court while admitting the appeal No.55/2006 on 22.12.2010 has framed the following substantial questions of law: “(i) Whether in the facts and circumstances of the case, the Hon’ble ITAT was justified in not allowing the depreciation claimed by the appellant without there being any contrary evidence? (ii) Whether in the facts and circumstances of the case, the Hon’ble ITAT was justified in holding that the machine installed by the appellant company is not an energy saving device? (iii) Whether in the facts and circumstances of the case, the Hon’ble ITAT was justified in not considering the certificate issued by the manufacturing company stating that the machine installed by the appellant is a thermally efficient in energy saving? (iv) Whether in the facts and circumstances of the case, the Hon’ble ITAT was justified in not considering the machine installed by the appellant having automatic switch off facility on the completion of the job is not an energy saving device? (v) Whether in the facts and circumstances of the case, the Hon’ble ITAT was justified in not treating the boiler as a part of the composite unit particularly when without boiler the machine cannot be put to operation.” 2.1. This Court while admitting the appeal No.464/2008 on 21.08.2009 has framed the following substantial questions of law: (3 of 17) [ITA-55/2006] “(i) Whether in the facts and circumstances of the case, the Hon’ble ITAT was justified in not allowing the depreciation claimed by the appellant without there being any contrary evidence? (ii) Whether in the facts and circumstances of the case, the Hon’ble ITAT was justified in holding that the machine installed by the appellant company is not an energy saving device? (iii) Whether in the facts and circumstances of the case, the Hon’ble ITAT was justified in not considering the certificate issued by the manufacturing company stating that the machine installed by the appellant is a thermally efficient in energy saving? (iv) Whether in the facts and circumstances of the case, the Hon’ble ITAT was justified in not considering the machine installed by the appellant having automatic switch off facility on the completion of the job is not an energy saving device? (v) Whether in the facts and circumstances of the case, the Hon’ble ITAT was justified in not treating the boiler as a part of the composite unit particularly when without boiler the machine cannot be put to operation.” 2.2. This Court while admitting the appeal No.53/2011 on 15.09.2011 has framed the following substantial questions of law: “(i) Whether in the facts and circumstances of the case, the Hon’ble ITAT was justified in not allowing the depreciation claimed by the appellant without there being any contrary evidence? (ii) Whether in the facts and circumstances of the case, the Hon’ble ITAT was justified in holding that the machine installed by the appellant company is not an energy saving device? (iii) Whether in the facts and circumstances of the case, the Hon’ble ITAT was justified in not considering the (4 of 17) [ITA-55/2006] certificate issued by the manufacturing company stating that the machine installed by the appellant is a thermally efficient in energy saving? (iv) Whether in the facts and circumstances of the case, the Hon’ble ITAT was justified in not considering the machine installed by the appellant having automatic switch off facility on the completion of the job is not an energy saving device? (v) Whether in the facts and circumstances of the case, the Hon’ble ITAT was justified in not treating the boiler as a part of the composite unit particularly when without boiler the machine cannot be put to operation.” 3. The brief facts of the case are that the return declaring NIL taxable income and unabsorbed depreciation of the relevant year was filed which was processed under section 143(1)(a) of the Income Tax Act. The assessee subsequently filed a revised return declaring the unabsorbed depreciation of the year. It has been stated that interest due to financial institutions in earlier years has been paid during the year and the same was allowable u/s 43B of the Act. Case was selected for scrutiny. Notice u/s 143(2) was served on the assessee. In response to the notice the company appeared before the AO from time to time. 4. Counsel for the appellant has fairly conceded that all the issues are interconnected and, therefore, only one issue is required to be decided. 5. Counsel for the appellant Mr. Sunil Nath has taken us to the observation made by the Assessing Officer with regard to depreciation on dying machine which reads as under: (5 of 17) [ITA-55/2006] “During the year assessee’s total claim for depreciation amounted to Rs.17,42,72,455/-. Scrutiny of the same revealed that the assesseee has claimed deduction of Rs.6,89,53,605/- being 100% depreciation on certain items of P&L machinery. Vide query No.3 of questionnaire dated 23.9.1998 the assessee was required to furnish the dtails of such claim and to explain as to how 100% depreciation is allowable on the Plant & Machinery. The assessee vide its reply dated 2.1.1999 furnished the break up of the claim of 100% depreciation on Plant & Machinery as under:- S No. 1 2 3 4 5 6 7 Name of Supplier Morrison Textile Machinery Co (Dye machine – Automatic Monitor) -do- IAEC, Boilers, Ranipet (BOILER) Mangaladeep Mateal Corporation, Bombay (POWER CABLE CONDUCTOR) Crompton Greaves, A’bad (TRANSFORMER) Installation, Transportation charges etc. TOTAL COST Amount 5,97,18,603/- 38,27,397/- 21,10,988/- 9,19,856/- 9,38,680/- 14,38,681/- 6,89,53,605/- On scrutiny of the schedule for the depreciation on various fixed assets it is seen that depreciation on the aforesaid Dyeing machine other than BOILERS is allowable @ 25% only. The assessee treated this device as “energy saving device embed unit” and claimed 100% deprecation. Assessee’s plant and machinery under consideration does not fall under this category. It is in fact a dyeing machine used in Textile industry. Therefore, depreciation @ 25% is allowable. Since the assets were put to use for less than 6 months, 50% of the normal rate would be allowed. In response to the queries raised the assessee furnished its detailed reply (6 of 17) [ITA-55/2006] vide its letter dated 6/1/99 as under:- “We have submitted the details, list of plant & machinery along with invoices which is entitled for 100% depreciation. The list of machinery includes the main item i.e. 1219 MM 48” Faceo Roller width 12 Warp Indigo Dye Range 72” Face 1828 MM Roller width Integrated Range. Less Pare Brusher and Singer. It is a imported latest dyeing machine, imported from USA and the operation of this machine includes automatic monitoring of its use and automatic switch off once job is completed. This machine is energy saving device embed unit. In old type of dyeing machine these facilities were not available and the consumption of energy was more as compared to the production. Since it is a energy saving device, we have correctly claimed 100% depreciation on this item of machinery as per rule 3(iii) of the Income Tax Rules. Similarly, the second item machinery is also imported latest dyeing machine having above advantages. The cost of the machine is Rs. 38,27,397/-. Third item is Efficiency Boiler costing to Rs. 21.10 lakhs which is covered by rule 3(iii) (DR) of the Income Tax Rules, 1961. The item No. four and fifth are electrical conductor and transformer which is covered by rule 3(E) of the Income tax Rules.” Assessee’s claim for 100% depreciation on Dyeing machine is rejected. 5.1 He has also taken us to the order of the CIT(A) wherein in para 5.1 and 5.3 which was also reiterated by Mr. Mathur appearing on behalf of the department, the CIT(A) has observed as under: “5.1 The Ao at pages 5 & 6 of the asstt. Order allowed depreciation @ 100% on certain part of the machinery i.e. Boiler and did not allow 100% depreciation on other machines, but allowed depreciation on those machine @ 25%. (7 of 17) [ITA-55/2006] The main contention of the assessee company is that machines/equipments installed during the year comes within the category of Energy saving Devices. As per item No. 3(iii) of Append to the Income-tax Rules, it will be noticed that in respect of Energy Saving Devices 100% depreciation has been provided. During the year underconsideration equipments/plants ware installed. This also includes installation of Boiler. Such equipments including Boiler were installed for the use of dyeing. The latest equipments were imported and such equipments include automatic monitoring its use i.e. automatic switch off and switch on. Thus such automation i.e. automatic switch off and switch on conserve the energy. Therefore, such equipments come within the category of Energy Saving Devices. The AO while discussing this issue held that only the boiler which has been installed during the year will qualify for 100% depreciation and other equipments installed with quality only for normal depreciation available on plant & machinery. He simply disallowed the claim or the assessee for 100% depreciation holding that 100% depreciation on dyeing machine is not available. He has not discussed anything nor pointed out how the claim of the assessee appellant was not correct. It is submitted that while considering the applicability of particular rule one has to look into the totality of the facts. When one talks of plant & machinery or Energy Saving Devices, the composite unit has to be taken into consideration. The assessee company during the year installed the boiler and dye house in which equipments needed for energy conservation were included. Thus, the total plant including boiler will constitute the plant & machinery (Energy Saving Devices) on which 100 % depreciation is allowable. Machinery for the purpose of obtaining depreciation allowance need not be a self-contained unit; it may be a part of a bigger machine, or it may even be one that is used in conjunction with one or more machines before it can commence to operate. Nor would ‘machinery’ cease to be machinery merely because it has been installed as part of a manufacturing or (8 of 17) [ITA-55/2006] industrial plant. It would continue to be machinery even after it has been made an integral part of a plant. This position has now been established by the Supreme court in CIT V M/r Mohammad Ali. Thus, an electric supply company is entitled to depreciation and development rebate on the cost of mains, service lines and switch gears installed by it. So also, in the context of a rubber factory, the water supply system and miscellaneous equipment have been held to be part of machinery normally used in rubber factories. 5.3 I have considered the rival submissions. The details of the machinery on which 100% depreciation had been claimed are given at page-5 of the asstt. Order. After scrutiny, it was found that the depreciation on the dyeing machine other than boilers was allowable @ 25% only. The assessee treated this device as “energy saving device embed unit” and claimed 100% depreciation. Assessee’s plant and machinery under consideration does not fall under this category. It is in fact a dyeing machine used in Textile Industry. The ld. AR has not been able to convince as to how this machinery & accessory to the machine i.e. boiler entitled to 100% depreciation. This is not integral party of the machinery. Therefore, the AO was justified in restricting the claim of depreciation. The claim of depreciation had correctly been considered by the AO. No relief is allowed to the appellant on this account. “ 5.2 He has taken us to the certificate issued by the company which reads as under: “NOTE ON DYE HOUSE Rope dyeing machine is the main machines of Dye house to dye the prepared yarn, Apart from Dyes and chemicals used for dyeing the yarn, steam has the key role for proper & uniform dyeing of yarn with the best penetration which is a must. Afterward the yarn is dried by drying range where steam again has key role & hence the Boiler (9 of 17) [ITA-55/2006] is attached with the functioning of Dye house. We have high efficiency oil fired Boilers which work on approximately 83% thermal efficiency. To have the best performance, we use fuel additive in F.O., Feed water of commercial zero PPM quality and add oxygen scavenger, corrosion inhibitor, antisealant and sludge conditioner to the feed water. Thus we keep the heating surface of Boiler free from soot and seale deposition in water and fire side respectively and consequently energy is thermally conserved. The moment, dyeing machine is fed at approximately 6kg/cm2. As such we can’t separate Dyeing & Boiler and boiler is integral part of Dye house. As soon as maximum required pressure in Boiler is attained, the Boiler gets auto stopped and starts back automatically when lowest pressure is touched. Thus electrical energy is conserved by auto start and stop of Air Blower, Feed Pump, F.O. Pump, Electirc heater etc.” 5.3 He has also taken us to the letter issued by the manufacturer which reads as under: “Morrison rope dyeing machine is the best “Thermally energy efficient machines”, as it requires only 697 Kcal of heat to evaporate one kt of water.” 5.4 The depreciation has been ignored by all the authorities and the basic object of granting 100% depreciation has been frustrated. The Tribunal in para 10 of its order has observed as under: “10. By merely installing the auto-cut machine, it cannot be treated as Energy Saving Devices. In the absence of any legal provision or the case law, we are unable to agree with the submission made by the Ld. A/R. Hence, without repeating, we uphold the order of the lower authorities, who have (10 of 17) [ITA-55/2006] rightly allowed the depreciation @ 25%. Hence, we find no merit in this ground. This ground is dismissed.” 5.5 Counsel for the appellant has relied upon the decision of Orissa High Court in the case of M/s. Industrial Development Corporation of Orissa Ltd. vs. Commissioner of Income Tax & Ors. (2004) 268 ITR 130 wherein it has been observed as under: “15. It will be clear from the aforesaid communication that as per the said expert opinion of the Chief Electrical Inspector (T & D), at least two of the items, namely, 63 MVAR capacitor bank and 100 MVAR capacitor bank at different sub-stations come under 'energy saving devices'. In the communication dated November 7, 2003, of the Chief Electrical Inspector (T & D) quoted above, he has not stated that the other items of machinery in the different grid sub- sections purchased by the appellant from the OSEB are not devices which can form part of 'automatic electrical load monitoring systems'. The Commissioner himself has observed in the order dated March 29, 2001, under Section 263 of the Act that the transmission sub-stations consist of usual circuit breakers, transformers, isolators, arresters, control panel, capacitor bank, etc., which are normal components of voltage step-down systems where high voltage transmission is stepped down to lower voltage. What the Commissioner lost sight of is that transmission of electrical energy is made at high voltage with a view to prevent loss of electrical energy during transmission and if after such transmission, any plant and machinery are used for stepping down the high voltage transmission to lower voltage, such plant and machinery for stepping down the high voltage to lower voltage are part of a larger system of saving electrical energy. We are thus of the view that depreciation is allowable on the plant and machinery in question under Rule 5, (11 of 17) [ITA-55/2006] Appendix I, Part III(3)(iii)B of the Rules and the finding of the Commissioner in the order dated March 29, 2001, under Section 263 of the Act that the assessment order passed by the Assessing Officer allowing 100 per cent. depreciation on such plant and machinery was erroneous is not correct. For the self- same reasons, the finding of the Tribunal that the plant and machinery which have been purchased by the appellant and leased out to the OSEB is eligible for 25 per cent. depreciation is not correct. The first and third substantial questions of law are answered accordingly.” 5.6 He has also relied upon the decision of Madhya Pradesh High Court in the case of Dy. Commissioner of Income Tax, Special Range-2 vs. Vippy Solvex Products Ltd. MANU/MP/0558/2007 wherein it has been observed as under: “The core question which has been raised by the learned Counsel for the revenue is that although High efficiency boilers in the assessee's concern is entitled to 100 per cent depreciation, including the insulation material to preserve the heat, the other components such as coal container, coal conveyer, bucket elevator, dust collecting system qualify for 25 per cent depreciation and the Commissioner (Appeals) and Tribunal have, both, committed a patent error in setting aside the order of the assessing officer, declining 100 per ent depreciation on the abovesaid items. Learned Counsel for the department contends that the items for which now depreciation is being claimed at 100 per cent, are not the integral part of the boiler in order to become eligible for 100 per cent depreciation. Learned Counsel for the respondent- assessee, per contra, has pointedout that the coal container, coal conveyer, bucket elevator and dustcollecting system can have no independent existence and it is for the purposes of modernisation and automation that these items were pur-chased and (12 of 17) [ITA-55/2006] attached to the boiler and since they become an integral and inseparable part of the boiler, without having any utility otherwise, they are also entitled to depreciation at the rate of 100 per cent. We have heard the learned Counsel for the parties and perused there cord. As per the facts of the case, as revealed in ITA No. 132/2003,the assessee is a Public Limited Company which filed return for the assessment year 1993-94 on 30-12-1993 indicating taxable income of Rs. 2,25,71,671. The assessment was completed under Section 143(3) and income was determined in the sum of Rs. 41,68,560. The Company is engaged in the manufacture of Soya Oil in which it had installed a fluidized bed type boiler in the assessment year 1992-93. Thereafter the Company procured coal container, coal conveyor, bucket elevator and dust collecting system for better utilization of the boiler and claimed 100 per cent depreciation Ie., Rs. 48,84,796. Except for the insulating material, the Assessing Officer by his order dated 26-2-1996, rejected the claim for 100 per cent depreciation. The assessee appealed to the Commissioner (Appeals) against the order of the assessing officer and the appeal was allowed. Further appeal to the Income Tax Appellate Tribunal was dismissed by the Tribunal in the light of the judgment of the Hon'ble Kerala High Court in CIT v. Cochin Refineries Ltd. . The Tribunal observed that the observation of the assessing officer was conjectural as utility of an item should not be examined in isolation and the nature shall depend on the function for which its is used. It also observed that there was no doubt that the boiler will not function in the absence of coal supply system and, therefore, the Tribunal agreed with the Commissioner (Appeals) that the coal supply system was a part and parcel of the boiler and the entire coal system is entitled to depreciation at the rate of 100 per cent. Cochin Refineries Ltd.'s case (supra), the claim was made for depreciation in respect of waste ponds, fresh water tank, pipe racks, alloy piping, jetty facilities, cherry (13 of 17) [ITA-55/2006] pieker cranes, etc, as part of the Refinery. The claim was turned down by the Assessing Authority but the High Court, on the question being raised before it, came to the conclusion that the waste ponds, fresh water tank, pipe racks, alloy piping, jetty facilities, cherry piker cranes, etc, formed an integral part of the Refinery and it was entitled to a higher rate of depreciation and development rebate in that respect. In the case in hand, it has not been shown by the revenue that coal container, coal conveyer and bucket elevator, dust collecting system can individually be utilised f or any other purpose. Apart from the f act. that there was no other purpose for the use of this machinery in the assessee's Company, the further fact that these were integral components of the boiler, strengthens the view that they also become eligible to 100 per cent depreciation as was allowed in the case of Cochin Refineries Ltd. (supra). We are, therefore, of the view that the questions formulated in this case should be answered in favour of the assessee and against the revenue. We accordingly hold that the Tribunal did not err in extending benefit to the assessee towards depreciation at the rate of 100 per cent on the automatic coal system, treating it to be a part and parcel of the boiler, and that on these items the assessee was not required to restrict its claim to 25 per cent.” 5.7 He has also contended that the said judgment of Madhya Pradesh High Court was taken to the Supreme Court vide its order dated 11.02.2008 dismissed the SLP. 6. Mr. Mathur has taken us to schedule 3 (iii) E which reads as under: “(3) (i) Wooden parts used in artificial silk manufacturing machinery (ii) Cinematograph files- bulbs of studio lights (iii) Energy saving devices, being--- (14 of 17) [ITA-55/2006] A. Specialised boilers and furnaces:… B….. C….. D…… E. Electrical equipments: (a) Shunt capacitors and synchronous condenser systems (b) Automatic power cut off devices (relays) mounted on individual motors (c) Automatic voltage controller (d) Power factor controller for AC motors (e) solid state devices for controlling motor speeds (f) Thermally energy-efficient stenters (which require 800 or less kilocalories of heat to evaporate one kilogram of water) ” 6.1 Counsel for the respondent Mr. Mathur has contended that the boiler is granted depreciation but dyeing machine will not be a part of it. The certificate issued by the manufacturer is for the purpose of advertisement. He has taken us to the judgment of Madras High Court in the case of The Commissioner of Income Tax vs. Adar Tea Products Company [2009] 314 ITR 38 (Mad) where the word being has been interpreted. The Madras High Court has observed as under: “2. The assessee had claimed depreciation at 100% on Fluid Bed Drier for the Assessment Year 1994-95. It was allowed. The notice under Section 154 of the Income Tax Act, 1961 ('Act' in short) was issued calling for the assessee's objection for withdrawal of the 100% depreciation. The assessee objected to the disallowance. The objections were rejected as untenable since the Revenue took the stand that a Fluid bed drier is not enumerated as an energy saving device in the old Appendix-I which is applicable for the Assessment Year period from 1988- (15 of 17) [ITA-55/2006] 1989 to 2002-2003. Even earlier, the Revenue took the same stand for the Assessment Year 1993-94. Those orders were confirmed in appeal. But, the appeal filed against the assessment orders in this case was allowed by the Commissioner of Income Tax (Appeals), relying on (2002) 253 I.T.R. 71 [Asst. C.I.T. vs. Bijoy Nagar Tea Co. Ltd.] (Income Tax Appellate Tribunal, Calcutta \"B\" Bench) and the Assessing Officer was directed to allow 100% depreciation. The Tribunal also dismissed the appeal filed by the Revenue. So, the present tax case appeal has been filed. 5. The Table of Depreciation reads as follows :- Block of assets Depreciation allowance as percentage of written down value III. MACHINERY AND PLANT ... 8... (ix) Energy saving devices, being A. Specialised boilers and furnaces : (a) Ignifluid/fluidised bed boilers ] (b) Flameless furnaces and continuous ] pusher type furnaces ] (c) Fludised bed type heat treatment ] 80 furnaces ] (d) High efficient boilers (thermal ] efficient higher than 75 per cent ] in case of coal fired and 80 per ] cent in case of oil/gas fired ] boilers ] 13. Let us see what can be used in the above extracts to substitute the word \"being\". For example, in the sentence, \"excise duty being a levy on the manufacture or production of the goods\" can be read to mean, \"excise duty which is a levy on the manufacture or production of the goods\". Therefore, how we may understand the word \"being\" used in the depreciation table is, it means, Energy saving devices \"which are\" the devices mentioned therein. Further, in the same table, the subject category in 8(ix) has the caption \"specialised boilers and furnaces\" and the word \"drier\" is not used. In the same table, the words \"ventilator used with anesthesia apparatus\" and the words (16 of 17) [ITA-55/2006] \"ventilators other than those used with anesthesia\" are used with reference to \"life saving... being...\". If we have to treat \"being\" as like or including, then it was not necessary to specifically mention \"ventilators used with anesthesia apparatus\" and \"ventilators other than those used with anesthesia\". So, it does appear that the depreciation table enumerates and exhausts those equipments for which depreciation is admissible at the rates mentioned. Under the head \"Renewal energy devices\", the \"solar crop driers\" as well as \"solar water heaters\" are included. So, if \"driers\" was meant to be included, we are sure, they would have been specifically indicated therein. 18. The Table of Depreciation states that the energy-saving devices for which 100% depreciation is allowed are the equipments named therein, i.e., \"the energy devices\" which are \"fluidised bed boilers, furnaces\". 21. The table includes energy-saving device in the context and for the purpose of encouraging industries to adopt energy- saving measures. While it was possible, in the context of encouraging industrial activity, to bring within the net of exemption, manufacture of products which may even 'be remotely considered as 'paper'; we cannot adopt the same reasoning here, since the table indicates its intention to afford depreciation at the rates mentioned only to the specifically listed equipments. It is not even proved that a drier of the kind mentioned herein is an energy saving device.” 6.2 Mr. Mathur has further contended that the word ‘being’ has been rightly interpreted by the Madras High Court and, therefore, the view taken by the Tribunal is required to be upheld. While referring to Schedule 3, he has contended that the intention of legislation was very clear that in the items which were included in the schedule, the dyeing machine was never part of the boiler and (17 of 17) [ITA-55/2006] therefore, the view taken by all the authorities the appeal deserves to be dismissed. 7. We have heard counsel for both the sides. 8. Before proceeding with the matter it will be out of place to mention that the boiler is the main part of the dying machine to increase the efficiency and the energy level and boiler being a part of effective machinery which converts water into steam at a lower efficiency of the energy. 9. In our considered opinion, in view of the judgment of the Madhya Pradesh High Court in the case of Dy. Commissioner of Income Tax, Special Range-2 vs. Vippy Solvex Products Ltd. (supra) the view taken by the Tribunal is required to be accepted modified that the boiler is a part of dyeing machine and any part which is required in dying process is required to be granted 100% depreciation. 10. In that view of the matter, all the authorities have seriously committed the error. 11. In that view of the matter, the issue is answered in favour of the assessee and against the department. 12. All the appeals stand disposed of accordingly. 13. A copy of this judgment be placed in each of the file. (VIJAY KUMAR VYAS),J. (K.S. JHAVERI),J. Asheesh Kr. Yadav/7-9 "