2011 (2) TMI 453

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.....   2. This appeal has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 ("the Act") against order dated 3.10.2007 passed by the Income Tax Appellate Tribunal, Chandigarh Bench 'A', Chandigarh in ITA No.20/Chandi/2007, for the assessment year 1995-96, claiming following substantial questions of law:-   "i). Whether on the facts and circumstances of the case, the Ld. ITAT was right in law in allowing the depreciation on the new plant and machinery which was not put to use during the year under consideration?   ii) Whether on the facts and circumstances of the case, the order passed by Ld. ITAT is perverse as the evidence available on record has not been considered by the ITAT?   iii) Whether....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ook related to new boiler and turbine etc. "had nothing relating to production from the expanded plant is produced/filed." According to the CIT (Appeals), the running of boilers and turbines cannot be taken as an evidence relating to readiness of the plant & machinery for the purpose of production. We have considered the entire gamut of facts and find that the inference drawn by the CIT(Appeals) is misplaced. Firstly, the excise records produced by the assessee duly show an enhanced crushing/production of molasses from the date when the assessee claimed to have put the new plant & machinery into operation i.e. from 28.3.95 onwards. This is evident from the copy of the Excise Register placed at page 11 of the paper book. Apart from the afore....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....to include machinery kept for use, even if the same was not actively used. Passive user has also been held to be user where it may be necessary for business of the assessee to keep the machinery ready for use. Reference may be made to the judgment of Delhi High Court in CIT v.Refrigeration & Allied Industries Ltd. [2001] 247 ITR 12. Therein reliance was placed on the following judgments:-   "i) Machinery Manufacturers Corporation Ltd. v. CIT [1957] 31 ITR 203 (Bom);   i) Machinery Manufacturers Corporation Ltd. v. CIT [1957] 31 ITR 203 (Bom);   ii) CIT. v. Viswanath Bhaskar Sathe [1937] 5 ITR 62 (Bom);   iii) CIT. v. Dalmia Cement Ltd.[1945] 13 ITR 415 (Patna);   iv) Liquidators of Pursa Ltd. v. CIT [1954] 25 I....