2010 (2) TMI 145

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....3, 2004. 2. The facts of this case are as hereunder: 3. The respondent- assessee is engaged in the manufacture and sale of Indian made foreign liquor. For the assessment year 1994-95, the assessee filed a return of income declaring a loss of Rs. 4, 65,540. The matter was taken up for scrutiny assessment. During the course of scrutiny, the Assessing Officer noticed that for the year ending March 31, 1994, the assessee had not carried on the manufacturing activities and that the business was closed on account of the local problems. The assessee had claimed the depreciation on the assets amounting to Rs. 2, 09,536 on plant and machinery. The Assessing Officer had not granted the depreciation on the ground that the assessee had not carrie....

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....closed for the relevant assessment year, the assessee was not entitled to claim depreciation as well as expenditure under sections 32 and 37 of the Income-tax Act. To support his arguments, he has relied upon the judgment of the Supreme Court in CIT v. Lahore Electric Supply Co. Ltd. [1966] 60 ITR 1. Relying upon this judgment, he requests the court to set aside the order passed by the Commissioner of Income-tax (Appeals), as well as the Tribunal. 6. Per contra, the learned counsel appearing for the respondent-assessee contends that the facts involved in the present case are different from the case involved in Lahore Electric Supply Co. Ltd. [1966] 60 ITR 1. According to him, the aforesaid judgment has no application to the facts and cir....