2017 (5) TMI 833

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....ice u/s 153A, the assessee filed return of income admitting loss of Rs. 7,97,85,980 (including depreciation of Rs. 4,13,67,829). Originally the assessment was completed u/s 143(3) r.w.s. 153A of the Act determining the loss at Rs. 6,00,59,191 (including depreciation loss of Rs. 4,13,67,829. 3. The AO observed that the assessee has not generated any power during the year but claimed depreciation on the assets like canals, power house and other buildings, plant & machinery and transmission lines amounting to Rs. 4,09,30,784. As the assets were not put to use by the assessee, the depreciation claimed on these assets is not allowable and as this mistake is apparent from the notice issued by the AO u/s 154, the same was proposed to be disallo....

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....lid. 5. The learned Commissioner of Income- Tax(Appeals) erred in confirming the Assessing officer's observation that the power generating unit did not function during the previous year and that therefore, deprecation is not allowable. 6. The learned Commissioner of Income-Tax (Appeals) ought to have seen that the Assessing Officer should not have disallowed depreciation on the ground that the power generating unit did not function during the year. 7. Any other ground that may be urged at the time of hearing". 6. I heard both the parties. The AO issued notice u/s 154 dt. 22.01.2009 requiring the assessee to explain as to why depreciation claimed by the assessee should not be disallowed. It was the contentio....

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....tract materialized. They were not actually run on the road not because they were under repair or were unfit for use for one reason or the other, but only because there were not enough contracts during the year to ply the buses for more than 30 days each. This did not mean that so far as the assessee was concerned it did not employ the trucks for the purposes of business. They were kept ready for operation and they were there only in the business and for use in that business. The buses were used for the purposes of the business throughout the year though they were not actually plied on the roads for more than 30 days and the assessee was entitled to grant of normal depreciation in respect of the four buses. The allowances for normal....