1. These two appeals, though they have been filed against two different orders, involve some common disputes and they are, ther efore, disposed of by this single order.
2. The first ground in both these appeals relates to the assessee's claim for depreciation. The asses see is running a cold storage and the ITO granted depreciation at 5 per cent on the building and 10 per cent on the machinery. Before the AAC the assessee disputed the rate at which the same should have been allowed and its argument was that cold storage was a refrigeration plant and as such the depreciation should have been allowed at 15 per cent instead of 10 per cent allowed by the ITO as the same was covered by Sub-item No. 13 of item No. IISI(B) of Part I of Appendix I prescribing the rate of depreciation for the various assets. The AAC, however, noticed that Sub-item No. 13 referred to refrigeration plant, containers, etc., other than racks and not to entire refrigeration plant. He further noticed that from the details of plant and machinery amounting to Rs. 1,30,000 filed before him, it transpired that it did not include the cost of racks, etc., which had been debited to the building account. However, the details included boards, switches, wiring, etc., which cannot be said to be refrigeration plant container. According to the AAC. no part of the plant and machinery used in a cold storage for storing potatoes and similar things could have refrigeration plant containers and as such the case of the assessee would not be covered by Sub-item No. 13 at all. The AAC was of the opinion that the assessee's case was covered by Sub-item Nos. 2 and 7, namely, air-conditioning machinery and machinery and plant coming into contact with corrosive chemicals. He, therefore, directed the ITO to find out the part of the plant and machinery which was covered by Sub-item Nos. 2 and 7 such as compressor machine, deep freezer, ammonia filling material, etc., and to allow depreciation at 15 per cent in respect of such part of the plant and machinery. The assessee has challenged this conclusion in its first ground of appeals before us and contended that electrical motors, switch boards and other electrical fittings pertained to the plant as a whole and so also racks which are part and parcel of the plant. Hence, according to it, the depreciation should have been allowed at 15 per cent and the AAC should not have bifurcated the machinery, electrical goods and racks for the purpose of difference in the rates of depreciation. In support of its claim, its representative referred to a judgment of the Allahabad High Court in CIT v. Kanodia Cold Storage  100 ITR 155 wherein the definition of plant in Section 43(3) of the Income-tax, 1961 ('the Act') was held to include things normally included therein and a building with insulated walls used as a freezing chamber was held to be part of the air-conditioning plant of the cold storage of the assessee so as to be entitled to special depreciation at 15 per cent on its written down value. This judgment, of course, was distinguished by the Calcutta High Court in CIT v. Mongolia Dairy Products (India)  119 ITR 26 wherein it was held that the cold storage plant does not include the building but electrical machinery and equipment, i.e., switchgear and motor, forming part of the refrigeration, the plant was entitled to depreciation at special rate of 15 per cent. There is a small difficulty in the way of the assessee inasmuch as Sub-item No. 13 in Item No. HI of Part I of Appendix I to the Income-tax Rules reads as under : From this it, prima facie, follows that only the plant containers were sought to be considered for higher rate of depreciation under this sub-item and not the refrigeration plant itself but this appears to be a slip on the part of the Legislature because in the Schedule, as originally framed, there was a comma after the words 'refrigeration plant'. Though that has been omitted in the subsequent years, it is obvious that the Legislature did not want to make any change in this clause and this issue came up for reconsideration before the Punjab and Haryana High Court in CIT v. Gurinder Singh Karion  133 1TR 300, wherein it was held that ice plant amounted to refrigeration plant and ice plant machinery was entitled to depreciation at 15 per cent in view of the amendment of the relevant rule with effect from 1-4-1970. The intention could not possibly be to allow a higher rate of depreciation to containers but a lower rate to the plant itself. In view of the aforesaid provision of law, we are of the opinion that if electrical motors, switch boards and other electrical fittings were part and parcel of the refrigeration plant, the assessee's claim for higher rate of depreciation thereon should have been considered and allo wed. We, therefore, direct that the ITO shall reconsider the assessee's claim in the light of our aforesaid observations and the observations of the AAC to the contrary should be deemed to have been set aside. The claim of the assessee would be admissible under Sub-item No. 13, and not only under Sub-item Nos. 2 and 7.
3 to 6. [These paras are not reproduced here as they involve minor issues.]