TaxTMI 
TaxTMI 
2011 (3) TMI 620
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....hereby setting aside the order of the CIT (Appeals) and granting the benefit of depreciation in favour of the assessee under Section 32 of the Income-tax Act. Being dissatisfied, the Revenue has come up with the present appeal. At the time of admission of the present appeal, a Division Bench of this Court admitted this appeal on the following question of law: "Whether on the facts and in the circumstances of the case, and in law, the I.T.A.T. erred in granting depreciation in respect of the factory in which no operation was carried out during the relevant previous year?" The facts giving rise to filing of the present appeal may be summed up thus: a) The assessee started its business in the State of Jammu and Kashmir ....
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....eciation on machinery and plant. Being dissatisfied, the assessee preferred an appeal before the Income-tax Appellate Tribunal and by the order impugned in this appeal, the Tribunal has set aside the order passed by the Assessing Officer and the Appellate Authority by holding that as the plant and machinery were owned by the assessee and at the same time, the assessee was all along ready and willing to run the same, he would be entitled to get the benefit of Section 32 of the Act notwithstanding the fact that due to adverse law and order situation in the State of Jammu and Kashmir, the assessee could not actually use the plant and machinery. The Tribunal, consequently, directed the Assessing Officer to grant depreciation in accordance with ....
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....missioner of Income-tax vs. Union Carbide (I) Ltd. (2002) 290 ITR 353 and contends that the word "used" occurring in Section 32 of the Act should be given broad construction and even if it is not actually in use, the assessee should be entitled to the benefit of depreciation if it was otherwise ready for use. Mr. Khaitan also relied upon the another Division Bench decision of this Court in the case of Hindustan Gas & Industries Ltd. vs. Commissioner of Income-tax, reported in (1995)242 ITR page 186. Therefore, the only question that arises for determination in this appeal is whether the assessee is entitled to get the benefit of depreciation under Section 32 of the Income-tax Act notwithstanding the fact that the plant and machinery could n....
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....e of the business carried on by the assessee, he will not be entitled to the benefit of depreciation because the said machinery is not meant for the use in the business of the assessee. On the other hand, an assessee doing various manufacturing items may have purchased different machineries having regard to the diversity of the orders he gets or expects to get. In the process, a particular type of machinery may be required for finishing a particular type of a product. If in a given assessment year, the assessee did not get any order of manufacture of that particular item necessitating the use of that particular machinery, for that reason, he should not be deprived of the benefit of depreciation of that machinery although the same wa....