2004 (10) TMI 31

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....as plant was commissioned and put to use for less than 180 days, that is only from October 9, 1992. The Commissioner of Income-tax (Appeals) by his order dated August 13, 1996, upheld the disallowance of depreciation of 50 per cent, of bio-gas plant. For this purpose, the Assessing Officer and the appellate authority relied on the statement said to have been made by the representative of the assessee on February 28, 1996, at the time of hearing that the bio-gas plant was commissioned on October 9, 1992, and was put to use from that date. A further appeal preferred by the assessee was allowed by the Income-tax Appellate Tribunal, Indore Bench, by order dated October 4, 2002, with a direction to the Assessing Officer to allow the claim of the....

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....bio-gas plant having been operational on October 9, 1992, i.e., after the expiry of half of the previous year relevant to the assessment year in question?" The question whether the bio-gas plant was put to use for the purpose of business of the assessee from a particular date, is a question of fact. The Tribunal after exhaustive reference to the records (correspondence, bills and other documents) has recorded a finding of fact that the installation and use was from May, 1992. The finding may not, therefore, call for interference. Learned counsel for the Revenue placed reliance on the letter dated October 17, 1992, written by the assessee to the Chairman, M.P. Pollution Control Board, wherein it was confirmed that the normal flaring of met....

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....roduction of a machinery would fall within the ambit of "used for the purpose of business". The following observations are relevant: "There must be use of plant and machinery for the purpose of business as contemplated in section 32 of the Act. There is thus a thin line between the trial run and actual production, or many a time, the word used is 'commercial production'. If the machines are installed properly and it gives good result, then one need not wait for any rectification in the system. There may be some cases wherein after commencement of the production, the machine may not give proper results-may be on account of failure of certain parts, may be on account of requirement of certain additional machinery, etc. In such a case, the pr....