2015 (9) TMI 850

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....orrect in law in holding that the Assessee-firm was not entitled to depreciation claimed by it in respect of Unit-II?" 3. The facts to this appeal are that the Assessee is a registered firm carrying on business of manufacturing bag stitching machines in a factory situated at Noida since 1981. In the year 1987 the Assessee applied for and was allotted plot No. A-11, Sector-57, Noida. It constructed a factory building thereon in the accounting year ending 31st March 1989 (AY 1989-90) and the cost of the factory building was Rs. 9,77,775.58. Machinery worth Rs. 1,10,825 was installed in the said factory (styled Unit II) in the previous year 1989-90. The Assessing Officer while framing assessment under Section 143 (3) of the Act noted that the....

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....e decision of the Supreme Court in Federation of Andhra Pradesh Chambers of Commerce and Industry v. State of Andhra Pradesh [2001] 247 ITR 36 (SC) and concluded that "in order to claim depreciation, it is important, inter alia, that the asset must be actually used for the purpose of business." Accordingly, it was held that "the CIT (A) was not justified in granting depreciation." 7. This Court has heard the submissions of Mr. S. Krishnan, learned counsel for the Appellant. None appears for the Revenue. 8. As noted by this Court in a recent decision in National Thermal Power Corporation Limited v. Commissioner of Income Tax (2013) 357 ITR 253 (Del), two conditions are necessary to be fulfilled before an allowance by way of depreciation un....

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....specified for land used for industrial purpose." In other words, given the background in which the question arose, the interpretation placed on the word 'used' was in favour of the Assessee. 10. In the present case the context is the claim for depreciation under Section 32 of the Act. On facts, it is not in dispute that the building was constructed in the previous year 1988-89. Further, the plant and machinery was installed in the factory in the previous year ending 31st March 1990. The Court in of the view that the installation of the plant and machinery in the building would amount to use of the building so as to justify the claim for depreciation on the building. Further, the plant and machinery installed in the building during ....