C.

Profits and gains of business or profession

87

88

[Depreciation .
5. (1) Subject to the provisions of sub-rule (2), the allowance under clause (ii) of sub- section (1) of
section 32 in respect of depreciation of any block of assets shall be calculated at the percentages
specified in the second column of the Table in Appendix I to these rules on the written down value of
such block of assets as are used for the purposes of the business or profession of the assessee at any
time during the previous year.
89
[(1A) The allowance under clause (i) of sub-section (1) of section 32 of the Act in respect of
depreciation of assets acquired on or after 1st day of April, 1997 shall be calculated at the percentage
specified in the second column of the Table in Appendix IA of these rules on the actual cost thereof to
the assessee as are used for the purposes of the business of the assessee at any time during the previous
year :
Provided that the aggregate depreciation allowed in respect of any asset for different assessment years
shall not exceed the actual cost of the said asset :
Provided further that the undertaking specified in clause (i) of sub-section (1) of section 32 of the Act
may, instead of the depreciation specified in Appendix IA, at its option, be allowed depreciation under
sub-rule (1) read with Appendix I, if such option is exercised before the due date for furnishing the
return of income under sub-section (1) of section 139 of the Act,
for the assessment year 1998-99, in the case of an undertaking which began to
(a)
generate power prior to 1st day of April, 1997; and
for the assessment year relevant to the previous year in which it begins to generate
(b)
power, in case of any other undertaking :
Provided also that any such option once exercised shall be final and shall apply to all the subsequent
assessment years.]
(2) Where any new machinery or plant is installed during the previous year relevant to the assessment
year commencing on or after the 1st day of April, 1988, for the purposes of business of manufacture or
production of any article or thing and such article or thing
is manufactured or produced by using any technology (including any process) or
(a)
other know-how developed in, or
is an article or thing invented in,
(b)
a laboratory owned or financed by the Government or a laboratory owned by a public sector company
or a University or an institution recognised in this behalf by the Secretary, Department of Scientific and
Industrial Research, Government of India,
such plant or machinery shall be treated as a part of block of assets qualifying for depreciation at the
rate of 90[40] per cent of written down value, if the following conditions are fulfilled, namely :
the right to use such technology (including any process) or other know- how or to
(i)
manufacture or produce such article or thing has been acquired from the owner of
such laboratory or any person deriving title from such owner ;
the return furnished by the assessee for his income, or the income of any other
(ii)
person in respect of which he is assessable, for any previous year in which the said
machinery or plant is acquired, shall be accompanied by a 91certificate from the
Secretary, Department of Scientific and Industrial Research, Government of India, to
the effect that such article or thing is manufactured or produced by using such
technology (including any process) or other know-how developed in such laboratory
or is an article or thing invented in such laboratory ; and

(iii)

the machinery or plant is not used for the purpose of business of manufacture or
production of any article or thing specified in the list in the Eleventh Schedule to the
Act.
Explanation : For the purposes of this sub-rule,
laboratory financed by the Government means a laboratory owned by any body
(a)
[including a society registered under the Societies Registration Act, 1860 (21 of
1860)], and financed wholly or mainly by the Government ;
public sector company means any corporation established by or under any Central,
(b)
State or Provincial Act or a Government company92 as defined in section 617 of the
Companies Act, 1956 (1 of 1956) ; and
University means a University established or incorporated by or under a Central,
(c)
State or Provincial Act and includes an institution declared under section 3 of the
University Grants Commission Act, 1956 (3 of 1956), to be a University for the
purposes of that Act.]
87. See section 295(2)(d). Rule 5 has been substituted for the existing rule by the IT (Third
Amdt.) Rules, 1987, w.e.f. 2-4-1987. Original rule 5 was amended by the IT (Third Amdt.)
Rules, 1964, IT (Sixth Amdt.) Rules, 1969 and IT (Fourth Amdt.) Rules, 1971.
88. GENERAL : Parliament is competent to select and classify goods, and prescribe different
rates of depreciation - Titanium Equipments & Anodes Mfg. Co. Ltd. v. Union of India
[1994] 207 ITR 566 (Mad.). Allowance of depreciation is not dependent on genuineness
or defective nature of accounts - Allahabad Glass Works v. CIT [1961] 42 ITR 439
(All.)/P. Appavu Pillai v. CIT [1965] 58 ITR 622 (Mad.). Tribunal cannot take back the
depreciation benefit allowed by the Assessing Officer - MCorp Global (P.) Ltd. v. CIT
[2009] 178 Taxman 347 (SC).
OWNER : Anyone in possession of property in his own title exercising such dominion over the
property as would enable others being excluded therefrom and having right to use and occupy the
property and/or to enjoy its usufruct in his own right would be the owner of the buildings though a
formal deed of title may not have been executed and registered as contemplated by the Transfer of
Property Act, 1882, Registration Act, 1908 etc. - Mysore Minerals Ltd. v. CIT [1999] 106 Taxman
166/239 ITR 775 (SC). Registration is not necessary when assessee became owner under court
decree - Hotel Skylark & Restaurant (P.) Ltd. v. CIT [1996] 221 ITR 283 (Punj. & Har.).
Registration under Motor Vehicle Act is not a conclusive evidence of ownership of vehicle I.C.D.S. Ltd. v. CIT [2013] 29 taxmann.com 129 (SC). Registration under Motor Vehicles Act is
not a pre-requisite for claiming depreciation on vehicles - CIT v. Salkia Transport Associates
[1983] 143 ITR 39 (Cal.)/CIT v. Dilip Singh Sardarsingh Bagga [1993] 201 ITR 995 (Bom.)/CIT v.
Mirza Ataullaha Baig [1994] 76 Taxman 495 (Bom.). Registration of conveyance deed is not
necessary when assets are transferred to assessee by Government - CIT v. Tamil Nadu Small
Industries Development Corporation Ltd. [1995] 211 ITR 550 (Mad.)/CIT v. Tamil Nadu Small
Industries Corporation Ltd. [1995] 215 ITR 834 (Mad.)/CIT v. Tamil Nadu Dairy Development
Corporation Ltd. [1995] 216 ITR 535 (Mad.). Assessee would not be entitled to the claim of
depreciation on the consumer durables which were leased by the applicant to various customers,
and of which assessee never became owner - Gowri Shankar Finance Ltd. v. CIT [2001] 116
Taxman 375/248 ITR 713 (Ker.). Firm is entitled to depreciation on assets contributed towards
capital by partners, where partnership deed provided that the assets would go back to partners only
when firm is dissolved - CIT v. Amber Corporation [1974] 95 ITR 178/[1981] 127 ITR 29/[1994]
74 Taxman 302 (Raj.). Where an HUF used an asset for three months and then transferred the asset
to a firm as capital contribution, depreciation is not deniable to HUF - A.M. Ponnuranga Mudaliar

v. CIT [1996] 88 Taxman 482 (Mad.). Depreciation is allowable to firm on trucks transferred as
capital contribution by partners, even though transport registration continued in the names of
partners - CIT v. Navdurga Transport Co. [1999] 235 ITR 158 (All.). Company is entitled to
depreciation in case of assets purchased in name of directors - CIT v. Varanasi Auto Sales (P.) Ltd.
[2010] 190 Taxman 60 (All.).
USER OF ASSET : User of the asset need not be active use, and can even be passive use Capital Bus Service (P.) Ltd. v. CIT [1980] 123 ITR 404 (Delhi)/Forest Industries Travancore Ltd.
v. CIT [1964] 51 ITR 329 (Ker.)/Vishwanath Bhaskar Sathe v. CIT 10 ITC 386 (Bom.)/CIT v. India
Tea & Timber Trading Co. [1996] 221 ITR 857 (Gauhati). User of machinery for trial production
constitutes user for purpose of business - CIT v. Union Carbide (I) Ltd. [2002] 124 Taxman
859/254 ITR 488 (Cal.)/CIT v. Mentha & Allied Products [2010] 326 ITR 297 (All.). [Contrary
view : User means actual use and not passive use - CIT v. Suhrid Geigy Ltd. [1982] 133 ITR 884
(Guj.)/CIT v. Jiwaji Rao Sugar Co. Ltd. [1969] 71 ITR 319 (MP)/Bhikaji Venkatesh v. CIT [1937] 5
ITR 626 (Nag.)/CIT v. J.K.Transport [1998] 231 ITR 798 (MP)/Dy. CIT v. Yellamma Dassappa
Hospital [2007] 159 Taxman 58 (Kar.). User denotes actually used and not merely ready to use Dinesh Kumar Gulabchand Agrawal v. CIT [2004] 267 ITR 768/141 Taxman 62 (Bom.)]. Use
must be during the relevant accounting year - Liquidators of Pursa Ltd. v. CIT [1954] 25 ITR 265
(SC)/Central Provinces Manganese Ore Co. Ltd. v. CIT [1937] 5 ITR 734 (Nag.). Asset need not
be used throughout the year - CIT v. S.K. Sahana & Sons [1946] 14 ITR 106 (Pat.)/CIT v. Motors &
General Stores Ltd. [1946] 14 ITR 130 (Mad.)/CIT v. Dalmia Cement Ltd. [1945] 13 ITR 415
(Pat.). Owner need not necessarily be the user - CIT v. Sarveshwar Nath Nigam [1963] 48 ITR 853
(Punj.)/CIT v. Associated Cement Co. Ltd. [1968] 68 ITR 478 (Bom.). It is not requirement of
section 32 that depreciation claim in respect of any asset has to be allowed only if it continues to be
used for purposes for which it was being used earlier - CIT v. Udaipur Distillery Co. Ltd. (No. 2)
[2004] 135 Taxman 487/268 ITR 446 (Raj.). When the assessee bona fide install any machinery
and, to his misfortune, it becomes defective and non-functional, it cannot be said that the machinery
is not put into use for the purpose of business - CIT v. Sri Chamundeshwari Sugar Ltd. [2009] 183
Taxman 285 (Kar.). The expression used for the purpose of business when used with respect to
discarded machinery would mean that the user in business is not in the relevant financial year but in
the earlier financial years - CIT v. Yamaha Motor India (P.) Ltd. [2009] 183 Taxman 291 (Delhi).
A commercial asset capable of being exploited by more than one person will remain a commercial
asset even if it is temporarily put out of use or hired out - CIT v. Hindusthan Aluminium
Corporation Ltd. [1989] 176 ITR 206 (Cal.). Steps taken to set a completed building into gear
before shifting the business would be nothing but putting it to use - CIT v. O.P. Khanna & Sons
[1983] 140 ITR 558 (Punj. & Har.). Where business is set up, depreciation cannot be denied on the
ground that commercial production has not commenced - CIT v. Kanoria General Dealers (P.) Ltd.
[1986] 159 ITR 524 (Cal.). Existence of asset is essential, and hence depreciation cannot be allowed
on asset which was destroyed - E.I.D. Parry Ltd. v. CIT 1996 Tax LR 648 (Mad.). Where asset is
used partly for business and partly for private purposes, depreciation proportionate to business use
is to be allowed - CIT v. Sobharam Jokhiram [1960] 39 ITR 299 (Pat.). Kolhus and Karhais are
entitled to depreciation for full year even if they are let out for a part of the year - CIT v.
Sarveshwar Nath Nigam [1963] 48 ITR 853 (Punj.), CIT v. Banarsi Dass & Sons [1966] 61 ITR
414 (Punj.). Depreciation is admissible on business assets leased out - Sadhucharan Roy
Chowdhury, In re [1935] 3 ITR 114 (Cal.)/Mangalagiri Sri Umamaheswara Gin & Rice Factory
Ltd. v. CIT 2 ITC 251 (Mad.). Depreciation is admissible on buildings and furniture let out in the
course of carrying on hotel business - CIT v. Bosotto Bros. Ltd. [1940] 8 ITR 41 (Mad.). Assessee
engaged in leasing out generators is entitled to claim depreciation on generators not returned after
expiry of lease period due to lock-out in lessees factory - Hindustan Gas & Industries Ltd. v. CIT

[1995] 79 Taxman 151 (Cal.). Depreciation is admissible on assets under repairs - CIT v. G.N.
Agrawal [1994] 75 Taxman 30 (Bom.)/Khimji Visram & Sons (Gujarat) (P.) Ltd. v. CIT [1994] 209
ITR 993 (Guj.). Where factory was under lock-out during entire previous year, depreciation is not
admissible - CIT v. Oriental Coal Co. Ltd. [1994] 206 ITR 682 (Cal.). Assessee was entitled to
depreciation on its R&D assets though part of assessees business remained closed during relevant
previous year - CIT v. Udaipur Distillary Co. Ltd. (No. 3) [2004] 134 Taxman 616/268 ITR 451
(Raj.).
If the block of assets acquired by the assessee-company during the previous year is applied or
employed for the purpose of business of the assessee in that previous year for 180 days, that would
make the assessee eligible for full depreciation. The expression put to use in proviso to section
32(1) does not mean exploited for 180 days. The machinery could not be used on all days and
every day, right through the year from the date on which it is first put to use. There may be normal
working hours even during a day. There may be holidays intervening the 180 days. If the
depreciation allowance is to be calculated only with reference to the actual time or day the
machinery was actually used, the provision for depreciation will lose its significance - SIV
Industries Ltd. v. Dy. CIT [2008] 306 ITR 114 (Mad.). User condition when applied to block of
assets, it would mean use of block of assets and not any specific building, machinery, plant or
furniture in said block of assets - CIT v. Bharat Aluminium Co. Ltd. [2010] 187 Taxman 111
(Delhi)/Goetze (India) Ltd. v. Dy. CIT [2008] 25 SOT 171 (Delhi - Trib.). Once the asset is part of
block of assets and depreciation is granted on that block, it cannot be denied in the subsequent year
on the ground that one of the assets was not used by the assessee in some of the years. The user of
the assets has to apply to the block as a whole instead of individual assets. - Unitex Products Ltd. v.
ITO [2008] 22 SOT 429 (Mum. - Trib.). User criteria is to be fulfilled at time when an asset is to
form part of block of assets and once asset is part of block of assets, it loses its individual cost or
written down value and thereafter depreciation is allowable on entire block of assets - Asstt. CIT v.
SRF Ltd. [2008] 21 SOT 122 (Delhi - Trib.).
FOR THE PURPOSE OF BUSINESS : As long as asset is utilized for purpose of business of
assessee, requirement of section 32 will stand satisfied, notwithstanding non-usage of asset itself by
assessee - I.C.D.S. Ltd. v. CIT [2013] 212 Taxman 550/29 taxmann.com 129 (SC).
Usage of asset by assessee himself is not required to claim depreciation; in case of leasing of
vehicle, while asset is directly used by leasee company, it is user in course of business with
reference to leasing/lessor company - I.C.D.S. Ltd. v. CIT [2013] 29 taxmann.com 129 (SC).
OTHERS : Where income is estimated at flat rate, depreciation is separately allowable - CIT v.
Bishambhar Dayal & Co. [1994] 74 Taxman 123 (All.). In tea business, only 40 per cent of the
depreciation is deductible while computing written down value - CIT v. Suman Tea & Plywood
Industries (P.) Ltd. [1993] 204 ITR 719 (Cal.). Assets acquired under hire-purchase are eligible for
depreciation, subject to certain conditions - Circular No. 9, dated 23-3-1943 read with Letter F. No.
27 (20)-IT/59, dated 26-6-1959. Under hire purchase agreement, depreciation is allowable to the
user - CIT v. Nagpur Golden Transport Co. [1998] 233 ITR 389 (Delhi). Foreign motor cars used in
package tours by tour operators or travel agents are eligible for depreciation - Circular No. 609,
dated 29-7-1991. Fittings in employees residences are eligible for depreciation - Letter F. No.
10/14/66 - IT(A-I), dated 12-12-1966. Law as it stands on 1st April of the relevant financial year
must be applied - CIT v. Mirza Ataullaha Baig [1993] 202 ITR 291 (Bom.)/S.P. Jaiswal Estates
(P.) Ltd. v. CIT [1994] 75 Taxman 298 (Cal.)/CIT v. S. Palaniswamy [1996] 219 ITR 380 (Mad.).
Depreciation on assets acquired in earlier years for which no rate was prescribed in those years can
be claimed in a later year after rate is prescribed - CIT v. Shri Vallabh Glass Works Ltd. [1994] 207
ITR 963 (Guj.). Where assessee purchases trucks for which payment is made partly out of own

funds and balance out of loan repayable in monthly instalments, property in the vehicles passes on
to the assessee as soon as sale is made - CIT v. Mirza Ataullaha Baig [1994] 76 Taxman 495
(Bom.). Improvements of a permanent nature made to house properties taken on lease by an
assessee whose main business was taking such properties on lease and renting them out, are assets
entitling to depreciation - CIT v. Chandra Agro (P.) Ltd. [1979] 117 ITR 251 (All.). Where assessee
had by an agreement with vendor purchased an undertaking and also had taken over accrued and
future gratuity liability of vendor for a consideration, assessees claim that since amount towards
gratuity was capital expenditure, it was entitled to depreciation on said sum, was not allowable
since gratuity liability taken over by assessee did not fall under any of categories specified in
section 32 - CIT v. Hoogly Mills Co. Ltd. [2006] 157 Taxman 347/287 ITR 333 (SC). Where
assessee has not claimed depreciation on assets in earlier years under the belief that its activities are
agricultural in nature, but in a later year, such activities were held as non-agricultural, assessee can
claim depreciation on the original actual cost and not on any notional cost - CIT v. Hybrid Rice
International (P.) Ltd. [2009] 185 Taxman 25 (Delhi). For details, see Taxmanns Master Guide to
Income-tax Rules.
89. Inserted by the IT (Twelfth Amdt.) Rules, 1997, w.r.e.f. 2-4-1997.
90. Substituted for 50 by the IT (Tenth Amdt.) Rules, 1991, w.e.f. 1-4-1992.
91. See Press Release containing guidelines for issue of certificate. For details, see
Taxmanns Master Guide to Income-tax Rules.
92. Section 617 of the Companies Act, 1956, defines Government company as follows :
For the purposes of this Act, Government company means any company in which not less than
fifty-one per cent of the paid-up share capital is held by the Central Government, or by any State
Government or Governments, or partly by the Central Government and partly by one or more State
Governments and includes a company which is a subsidiary of a Government company as thus
defined.

[OLD APPENDIX I

[Applicable for assessment years 2003-04 to 2005-06]

[See rule 5]
TABLE OF RATES AT WHICH DEPRECIATION IS ADMISSIBLE
Block of assets

1
PART A
TANGIBLE ASSETS
2
I. BUILDING [See Notes 1 to 4 below the Table]
(1) Buildings which are used mainly for residential purposes except hotels and
boarding houses
(2) Buildings other than those used mainly for residential purposes and not
covered by sub-items (1) above and (3) below
(3) Buildings acquired on or after the 1st day of September, 2002 for installing
machinery and plant forming part of water supply project or water treatment system
and which is put to use for the purpose of business of providing infrastructure
facilities under clause (i) of sub-section (4) of section 80-IA
(4) Purely temporary erections such as wooden structures
3
II. FURNITURE AND FITTINGS
Furniture and fittings including electrical fittings [See Note 5 below the Table]
III. MACHINERY AND PLANT
(1) Machinery and plant other than those covered by sub-items (2), (3) and (8)
below :
Motor cars, other than those used in a business of running them on hire, acquired
or put to use on or after the 1st day of April, 1990
Aeroplanes - Aeroengines
5
(ii) Motor buses, motor lorries and motor taxis used in a business of running them
on hire
(iii) Commercial vehicle which is acquired by the assessee on or after the 1st day
of October, 1998, but before the 1st day of April, 1999 and is put to use for any
period before the 1st day of April, 1999 for the purposes of business or profession
in accordance with the third proviso to clause (ii) of sub-section (1) of section 32
[See Note 6 below the Table]
(iv) New commercial vehicle which is acquired on or after the 1st day of October,
1998, but before the 1st day of April, 1999 in replacement of condemned vehicle of
over 15 years of age and is put to use for any period before the 1st day of April,
1999 for the purposes of business or profession in accordance with the third proviso
to clause (ii) of sub-section (1) of section 32 [See Note 6 below the Table]
(v) New commercial vehicle which is acquired on or after the 1st day of April, 1999
but before the 1st day of April, 2000 in replacement of condemned vehicle of over
15 years of age and is put to use before the 1st day of April, 2000 for the purposes
of business or profession in accordance with the second proviso to clause (ii) of
sub-section (1) of section 32 [See Note 6 below the Table]
(vi) New commercial vehicle which is acquired on or after the 1st day of April, 2001
but before the 1st day of April, 2002 and is put to use before the 1st day of April,
2002 for the purposes of business or profession [See Note 6 below the Table]
Moulds used in rubber and plastic goods factories
Air pollution control equipment, being
(a) Electrostatic precipitation systems
(b) Felt-filter systems
(c) Dust collector systems

Depreciation
allowance as
percentage of written
down value
2

5
10

100
100
15

25
20

40

40

60

60

50
40

[100]

(d) Scrubber-counter current/venturi/packed bed/cyclonic scrubbers

(e) Ash handling system and evacuation system
(ix) Water pollution control equipment, being
(a) Mechanical screen systems
(b) Aerated detritus chambers (including air compressor)
(c) Mechanically skimmed oil and grease removal systems
(d) Chemical feed systems and flash mixing equipment
(e) Mechanical flocculators and mechanical reactors
(f) Diffused air/mechanically aerated activated sludge systems
(g) Aerated lagoon systems
(h) Biofilters
(i) Methane-recovery anaerobic digester systems
(j) Air floatation systems
(k) Air/steam stripping systems
(l) Urea Hydrolysis systems
(m) Marine outfall systems
(n) Centrifuge for dewatering sludge
(o) Rotating biological contractor or bio-disc
(p) Ion exchange resin column
(q) Activated carbon column
Solidwaste control equipments being - caustic/lime/chrome/mineral/cryolite recovery
system
(b) Solidwaste recycling and resource recovery systems
(xi) Machinery and plant, used in semi-conductor industry covering all integrated
circuits (ICs) (excluding hybrid integrated circuits) ranging from small scale
integration (SSI) to large scale integration/very large scale integration (LSI/VLSI) as
also discrete semi-conductor devices such as diodes, transistors, thyristors, triacs,
etc., other than those covered by entries (viii), (ix) and (x) of this sub-item and
sub-item (8) below
Life saving medical equipment, being
(a) D.C. Defibrillators for internal use and pace makers
(b) Haemodialysors
(c) Heart lung machine
(d) Cobalt Therapy Unit
(e) Colour Doppler
(f) SPECT Gamma Camera
(g) Vascular Angiography System including Digital Subtraction Angiography
(h) Ventilator used with anaesthesia apparatus
(i) Magnetic Resonance Imaging System
(j) Surgical Laser
(k) Ventilators other than those used with anaesthesia
(l) Gamma knife
Bone Marrow Transplant Equipment including silastic long standing intravenous
catheters for chemotherapy
(n) Fibre optic endoscopes including, Paediatric resectoscope/audit resectoscope,
Peritoneo-scopes, Arthoscope, Microlaryngoscope, Fibreoptic Flexible Nasal
Pharyngo Bronchoscope, Fibreoptic Flexible Laryngo Bronchoscope, Video
Laryngo Bronchoscope and Video Oesophago Gastroscope, Stroboscope,
Fibreoptic Flexible Oesophago Gastroscope
(o) Laparoscope (single incision)
(4) Containers made of glass or plastic used as re-fills
(5) Computers including computer software [See Note 7 below the Table]
(6) Machinery and plant, used in weaving, processing and garment sector of textile
industry, which is purchased under TUFS on or after the 1st day of April, 2001 but
before the 1st day of April, 2004 and is put to use before the 1st day of April, 2004
[See Note 8 below the Table]
(7) Machinery and plant, acquired and installed on or after the 1st day of
September, 2002 in a water supply project or a water treatment system and which

[100]

[100]

40

40]

50
60

50
100

is put to use for the purpose of business of providing infrastructure facility under
clause (i) of sub-section (4) of section 80-IA [See Notes 4 and 9 below the Table]
Wooden parts used in artificial silk manufacturing machinery9
(ii) Cinematograph films - bulbs of studio lights
(iii) Match factories - Wooden match frames
(iv) Mines and quarries :
(a) Tubs, winding ropes, haulage ropes and sand stowing pipes
(b) Safety lamps
(v) Salt works - Salt pans, reservoirs and condensers, etc., made of earthy, sandy
or clayey material or any other similar material
(vi) Flour mills - Rollers
(vii) Iron and steel industry - Rolling mill rolls
Sugar works - Rollers
(ix) Energy saving devices, being
A. Specialised boilers and furnaces:
(a) Ignifluid/fluidized bed boilers
(b) Flameless furnaces and continuous pusher type furnaces
(c) Fluidized bed type heat treatment furnaces
(d) High efficiency boilers (thermal efficiency higher than 75 per cent in case of
coal fired and 80 per cent in case of oil/gas fired boilers)
B. Instrumentation and monitoring system for monitoring energy flows:
(a) Automatic electrical load monitoring systems
(b) Digital heat loss meters
(c) Micro-processor based control systems
(d) Infra-red thermography
(e) Meters for measuring heat losses, furnace oil flow, steam flow, electric energy
and power factor meters
(f) Maximum demand indicator and clamp on power meters
(g) Exhaust gases analyser
(h) Fuel oil pump test bench
C. Waste heat recovery equipment:
(a) Economisers and feed water heaters
(b) Recuperators and air pre-heaters
(c) Heat pumps
(d) Thermal energy wheel for high and low temperature waste heat recovery
D. Co-generation systems:
(a) Back pressure pass out, controlled extraction, extraction-cum-condensing
turbines for co-generation along with pressure boilers
(b) Vapour absorption refrigeration systems
(c) Organic rankine cycle power systems
(d) Low inlet pressure small steam turbines
E. Electrical equipment:
(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)
(g) Series compensation equipment
(h) Flexible AC Transmission (FACT) devices - Thyristor controlled series
compensation equipment
(i) Time of Day (ToD) energy meters
(j) Equipment to establish transmission highways for National Power Grid to
facilitate transfer of surplus power of one region to the deficient region
(k) Remote terminal units/intelligent electronic devices, computer
hardware/software, router/bridges, other required equipment and associated
communication systems for supervisory control and data acquisition systems,
energy management systems and distribution management systems for power

100
100
100
100

100
80
80
80

80

80

80

80

80

80

transmission systems
(l) Special energy meters for Availability Based Tariff (ABT)
F. Burners:
(a) 0 to 10 per cent excess air burners
(b) Emulsion burners
(c) Burners using air with high pre-heat temperature (above 300C)
G. Other equipment:
(a) Wet air oxidation equipment for recovery of chemicals and heat
(b) Mechanical vapour recompressors
(c) Thin film evaporators
(d) Automatic micro-processor based load demand controllers
(e) Coal based producer gas plants
(f) Fluid drives and fluid couplings
(g) Turbo charges/super-charges
(h) Sealed radiation sources for radiation processing plants
Gas cylinders including valves and regulators
(xi) Glass manufacturing concerns - Direct fire glass melting furnaces
Mineral oil concerns:
(a) Plant used in field operations (above ground) distribution - Returnable packages
(b) Plant used in field operations (below ground), but not including kerbside pumps
including underground tanks and fittings used in field operations (distribution) by
mineral oil concerns
Renewable energy devices being
(a) Flat plate solar collectors
(b) Concentrating and pipe type solar collectors
(c) Solar cookers
(d) Solar water heaters and systems
(e) Air/gas/fluid heating systems
(f) Solar crop driers and systems
(g) Solar refrigeration, cold storages and air conditioning systems
(h) Solar steels and desalination systems
(i) Solar power generating systems
(j) Solar pumps based on solar-thermal and solar-photovoltaic conversion
(k) Solar-photovoltaic modules and panels for water pumping and other applications
(l) Wind mills and any specially designed devices which run on wind mills
(m) Any special devices including electric generators and pumps running on wind
energy
(n) Biogas-plant and biogas-engines
(o) Electrically operated vehicles including battery powered or fuel-cell powered
vehicles
(p) Agricultural and municipal waste conversion devices producing energy
(q) Equipment for utilising ocean waste and thermal energy
(r) Machinery and plant used in the manufacture of any of the above sub-items
Books owned by assessees carrying on a profession
(a) Books, being annual publications
(b) Books, other than those covered by entry (a) above
(ii) Books owned by assessees carrying on business in running lending libraries
IV. SHIPS
(1) Ocean-going ships including dredgers, tugs, barges, survey launches and other
similar ships used mainly for dredging purposes and fishing vessels with wooden
hull
(2) Vessels ordinarily operating on inland waters, not covered by sub-item (3)
below
(3) Vessels ordinarily operating on inland waters being speed boats [See Note 10
below the Table]
PART B
INTANGIBLE ASSETS

80

80

80
80

80

80

80

100
60
100

25
25
25

Know-how, patents, copyrights, trademarks, licences, franchises or any other

business or commercial rights of similar nature

25

Notes:
1.

"Buildings" include roads, bridges, culverts, wells and tubewells.

2. A building shall be deemed to be a building used mainly for residential purposes, if the built-up floor area
thereof used for residential purposes is not less than sixty-six and two-third per cent of its total built-up floor area
and shall include any such building in the factory premises.
3. In respect of any structure or work by way of renovation or improvement in or in relation to a building referred
to in Explanation 1 of clause (ii) of sub-section (1) of section 32, the percentage to be applied will be the
percentage specified against sub-item (1) or (2) of item 1 as may be appropriate to the class of building in or in
relation to which the renovation or improvement is effected. Where the structure is constructed or the work is
done by way of extension of any such building, the percentage to be applied would be such percentage as would
be appropriate, as if the structure or work constituted a separate building.
4.

Water treatment system includes system for desalination, demineralisation and purification of water.

5. "Electrical fittings" include electrical wiring, switches, sockets, other fittings and fans, etc.
6. "Commercial vehicle" means "heavy goods vehicle", "heavy passenger motor vehicle", "light motor vehicle",
"medium goods vehicle" and "medium passenger motor vehicle" but does not include "maxi-cab", "motor-cab",
"tractor" and "road-roller". The expressions "heavy goods vehicle", "heavy passenger motor vehicle", "light motor
vehicle", "medium goods vehicle", "medium passenger motor vehicle", "maxi-cab", "motor-cab", "tractor" and
"road-roller" shall have the meanings respectively as assigned to them in section 2 of the Motor Vehicles Act,
1988 (59 of 1988).
7. "Computer software" means any computer program recorded on any disc, tape, perforated media or other
information storage device.
8. "TUFS" means Technology Upgradation Fund Scheme announced by the Government of India in the form of
a Resolution of the Ministry of Textiles vide No. 28/1/99-CTI of 31-3-1999.
9. Machinery and plant includes pipes needed for delivery from the source of supply of raw water to the plant
and from the plant to the storage facility.
10. "Speed boat" means a motor boat driven by a high speed internal combustion engine capable of propelling
the boat at a speed exceeding 24 kilometres per hour in still water and so designed that when running at a speed,
it will plane, i.e., its bow will rise from the water.]