Actual use test for depreciation: idle machinery did not qualify for allowance under the income-tax provision.

Depreciation under the income-tax provision was confined to machinery actually used for the purposes of the business during the relevant accounting year. Machinery merely kept idle, even if connected with earlier production or suitable for business use, did not satisfy the statutory requirement. A restrictive reading based on actual employment in earning income was preferred over any negative construction that would extend allowance to unused assets. The claimed depreciation was therefore disallowed and the answer went against the assessee.

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Issues: Whether the expression "used for the purposes of the business" in the depreciation provision required actual use of the machinery during the accounting year, and whether machinery kept idle but connected with earlier production could still qualify for depreciation.

Analysis: The phrase "used for the purposes of the business" was held to require actual use during the relevant accounting year. A negative reading, under which machinery merely not used for other purposes would suffice, was rejected as inconsistent with the statutory language and capable of extending depreciation to machinery never brought into use or kept idle for long periods. The allowance for depreciation was treated as being linked to employment in the earning of income, not to mere ownership or suitability for business. Earlier decisions were relied upon for the same construction of the provision.

Conclusion: The machinery had to be used during the accounting year to qualify for depreciation, and the assessee was not entitled to the claimed allowance; the answer was against the assessee and in favour of the revenue.

Ratio Decidendi: Depreciation under the income-tax provision is allowable only for machinery actually used for the purposes of the business during the relevant accounting year.

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