TaxTMI 
TaxTMI 
2014 (1) TMI 871
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....hat the assessee claimed depreciation totaling Rs. 81,82,786 on various assets including depreciation amounting to Rs. 47,16,998 on the machinery which was used by its sister concern, viz., M/s Defiance Knitting Industries Private Limited (DKIPL). This machinery was purchased by the assessee in the preceding year and the same was installed at the factory premises of DKIPL, which was actually used by the said sister-concern. The assessee was called upon to explain as to why the depreciation on such machinery be not disallowed as it was not utilized by it but the sister-concern. The assessee submitted that it was operating from rented premises and due to paucity of space, the machinery was installed at the business premises of DKIPL, which wa....
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....ainment (India) (P.) Ltd v. Addl. CIT [ITA No. 1382/Mum/2012] entitling the assessee to depreciation on an asset forming part of block of asset notwithstanding the fact that it was not put to use during the relevant financial year. Per contra, the learned Departmental Representative relied on the judgment dated 10-07-2008 of the Hon'ble Punjab & Haryana High Court in Punjab Bone Mills v. CIT [ITA No. 596 of 2007], a copy of which has also been placed on record. In this judgment, the Hon'ble High Court noticed the fact that the boiler in respect of which benefit was claimed, was also used by the sister-concern. Their Lordships upheld the Tribunal order holding that deduction u/s 32 be restricted to a fair proportionate part thereof having re....
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.... A line of distinction needs to be drawn between a case in which an asset is acquired by the assessee for its business purpose and a case in which such asset is acquired by the assessee for a different entity for the business purpose of such entity. Whereas in the first situation, depreciation is to be allowed whether or not the asset is actually used, but there can be no question of allowing any depreciation in the second situation. Section 32 entitles an assessee to depreciation on the satisfaction of twin conditions. The first is that the asset should be owned by the assessee and the second is that it should be used for the business purpose. It is beyond our comprehension as to how an assessee can claim depreciation by reason of mere acq....
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....of carry forward loss to the tune of Rs. 25.19 crore. It shows that the affairs of the group concerns were cooked up in such a way so as to reduce the incidence of tax by shifting the claim of depreciation in tax paying company rather than genuinely retaining it in a non-tax paying entity. This type of arrangement between the sister-concerns needs to be discouraged. The further argument of the ld. AR that the claim of depreciation was allowed to the assessee in the preceding year and hence the principle of consistency should be followed, is again devoid of merits. On a pointed query, it was candidly admitted that the return for the last year was processed u/s 143(1) in a summary manner and the case was not taken up for scrutiny assessment. ....
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....cord. From a copy of the tax audit report shown to us during the course of proceedings, it is noticed that the assessee was following 'Cost or market price, whichever is less' as the method of its stock valuation. Under such a method, it is the market price of the stock, which is taken into consideration, if the same is less than the cost price. But where the assessee claims that the market value of closing stock is less than the cost price, then burden is on him to prove so. Such a burden can be discharged either by substantiating such value with the report of some approved valuer, or in some other reasonable but reliable manner. It can be possibly done by showing that such stock was subsequently sold at a price close to such declared valu....