2016 (12) TMI 937

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.... It filed its return of income on 27-09-2011 declaring total income at Rs. 8,14,300/-. During the course of assessment proceedings, the AO observed that assessee company is in the business of manufacturing of Ethanol from SDS. The raw material is required to be purchased from distilleries of Sugar Factories. The company has to contact various suppliers for bulk purchase at specified rates. During the relevant previous year for certain business related reasons the assessee company decided that it was better to sell the raw material in a market and made a contract with Godavari Bio Refineries to which the raw material was sold. The assessee had shown sale of Rs. 11,550/- in the profit and loss account. The AO noted that during the relevant pr....

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....spend the manufacturing activities at its factory. It was argued that suspension does not necessarily amount to its discontinuation or closure of the business and that the assessee is maintaining its establishment and waiting for improving the market condition. It cannot be said that it had abandoned or closed its business for ever. It was stated that it is not necessary that in the intervals of inactivity when it lies quiet and dormant, production process should necessarily be continued in order to claim depreciation. Relying on various decisions it was argued that once the machine has been brought for a particular purpose connected with the activities of the assessee and the same has not been discarded but is kept ready for use the assess....

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....d or destroyed during the previous year the assessee becomes entitled to depreciation. 7. However, the CIT(A) also was not satisfied with the arguments advanced by the assessee. Distinguishing the various decisions cited before him and relying on certain other decisions the Ld.CIT(A) upheld the action of the AO. 8. Aggrieved with such order of the CIT(A) the assessee is in appeal before the Tribunal. 9. I have considered the rival arguments made by both the sides, perused the orders of the AO and the CIT(A) and the paper book filed on behalf of the assessee. I have also considered the various decisions cited before me. The issue involved in the instant appeal is allowability of depreciation on the plant and machinery which were not used ....