2013 (1) TMI 455

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....red by the revenue under Section 260A of the Income Tax Act, 1961 (in short "the Act") against the order dated 23.9.2003 passed by the Income Tax Appellate Tribunal, Chandigarh Bench "B", Chandigarh (hereinafter referred to as "the Tribunal) in ITA No. 1081/Chandi/98, for the assessment year 1995-96. The appeal was admitted by this Court vide order dated 1.8.2006 for consideration of the substantial question of law as mentioned in para 5 of the memo of appeal which is as under:-   "Whether on the facts and in the circumstances of the case, the ITAT was right in law in rejecting the appeal of the revenue and upholding the order of the CIT(A) allowing depreciation on assets which have not been used by the assessee for its business ....

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....ed. However, the Tribunal on erroneous premise taking the assessment year 1994-95 as the lead year had deleted the addition. 5. On the other hand, learned counsel for the respondent assessee besides supporting the order passed by the Tribunal submitted that the purchase of machinery and letting out the same to M/s Mahavir Vanaspati Company was not doubted. Moreover, during the assessment year 1994-95, the order of the Assessing Officer was set aside by the CIT(A), wherein it was observed as under:- "Besides, the appellant has also produced before me copies of bills/vouchers to support his contention, which were stated to have been produced before the Assessing Officer, as is evident from the copy of letter, the relevant portion of whi....

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....esaid finding of the CIT(A) for the assessment year 1994-95 has not be upset by any authority. It was, thus, urged that once the genuineness of the purchase of machinery was not doubted, the depreciation for the subsequent years could not be disallowed. 7. After hearing learned counsel for the parties, we do not find any merit in the appeal. Learned counsel for the revenue was unable to demonstrate that the finding as recorded by the CIT(A) for the assessment year 1994-95 had not attained finality. Once it was held that the purchase of the machinery and letting out the same to M/s Mahavir Vanaspati Company was not in doubt, the depreciation could not be disallowed for the years subsequent to the assessment year 1994-95. The relevant obse....