TaxTMI 
TaxTMI 
2016 (11) TMI 1504
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....3,10,650/- on plant and machinery belonging to the appellant company and installed at customers premises for the business of the assessee. 2. The Ld. CIT(Appeals)-17 erred in concluding that the appellant was unable to adduce any evidence to show that the machines were part and parcel of its block of assets, inspite of the fact that: i). The machines in question were forming part of the annexures to fixed assets annexed with the tax audit report and submitted before the LearnedA.O. ii). Details of additions made to fixed assets given to the Learned A.Ovide letter dated 10thAugust, 2009. 3. The appellant craves leave to add, alter or amend any of the Grounds of appeal and submit a detailed statement of facts and case laws relied upon at the time of the hearing." 2. The brief facts of the case are that the assessee company was inter alia engaged in the business of trading in diagnostic machines, as well as supplying of reagents (i.e consumables) used in running of the said machines. The assessee filed its return of income as on 30.10.2007 declaring total income of Rs. 1,36,15,260/-, which was processed as such under section 143(1) of the 'Act'. The case of the asses....
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....ences in the hands of the assessee company had failed to appreciate the assesses entitlement towards claim of depreciation in the backdrop of its very nature of business and complete disregard of the material available on record. The Ld. A.R dispelling the observations of the lower authorities,therein took us through the relevant pages of its 'Paper book' (for short 'APB'), and submitted that the assessee company only after satisfying the requisite conditions contemplated u/s 32(1) of the 'Act' had raised its claim towards the statutory entitlement of depreciation in its return of income. That on the other hand the Ld. Departmental representative (for short 'D.R') heavily relied on the orders of the lower authorities and submitted that as the appeal of the assessee lacked any merit, therefore the order of the CIT(A) be sustained and the appeal of the assessee be dismissed. 5. We have considered the rival submissions of either side and perused the relevant material on record, including the orders of the authorities below and find that the sole issue involved in the present appeal lies in a narrow compass, i.e the entitlement of the assessee towards claim of depreciation on diagno....
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....ase of the reagents used in running of the said machines were to be carried out by the said customers only from the assessee, coupled with the fact that suchcustomers had not claimed any depreciation on such machines, had therein drawn our attention to the relevant pages of the 'APB', which we find are undisputedly the documents forming part of the records of the lower authorities. 5.2 We are of the considered view that in light of the nature of the business of the assessee as stands gathered from a perusal of the relevant pages of the 'APB', the conditional deployment of the diagnostic machines owned by the assessee, at the customers site, on the basis of agreements contemplating a strict stipulation that the customers shall remain under an obligation to exclusively purchase the reagents used in running of the said diagnostic machines from the assessee,is a purposive, conscious and intentional modus operandi adopted by the assessee to boost the sales of the reagents, which can safely be characterized as a strategic approach of the assessee prompted by business prudence in the very interest of its business.The Ld. A.R in order to fortify her contention that the diagnostic machin....
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....chines of Rs. 52,85,721/- which were put to such use as on 01.04.2006, were purchased by the assessee during the preceding yearand necessary adjustment as regards reduction of the same from the 'Op. Stock' as on 01.04.2006 stood duly reflected in Schedule 10 forming part of the 'P& loss a/c' for the year under consideration, and in order to fortify his contention drew our attention to Page 13 of the 'APB'. The Ld. A.R further taking us to Page 10 of the 'APB', which is a schedule of the 'Fixed assets' forming part of the 'Balance sheet' as on 31.03.2007, marked as 'Schedule 5', therein submitted that diagnostic machines of Rs. 52,85,721/- (supra)formed part of the additions to the 'Fixed assets' reflected at Rs. 1,15,79,767/- under the head 'Plant & Machinery' in the said schedule. The Ld. A.R further to support his aforesaid factual contention and remove any scope of doubt, took us to Annexure 'B' (Additions to the 'Fixed assets') which therein revealed that the addition of Rs. 52,85,721/-(supra) to the 'Plant & Machinery' as on 01.04.2006, did form part of the total additions of Rs. 1,15,79,767/-(supra) reflected in 'Schedule 5' (supra). Thus to be brief and explicit, the Ld. A.R....
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....eing of the view that the installation of the diagnostic machines owned by the assessee and forming part of its 'Block of assets' at the customers site, being a part of the business of the assessee, and rather as a matter of fact a modus operandi adopted by the assessee to boost its sales of reagents, therefore the latter being found to have duly satisfied the requisite conditions contemplated u/s 32(1) of the 'Act', is thus entitled to deprecation on the said diagnostic machines. We thus in light of our aforesaid observations set aside the order of the CIT(A) and allow the appeal of the assessee. (II). A.Y. 2008-09: The Grounds of appeal raised by the assessee in its appeal for the assessment year 2008-09, marked as ITA NO. 6180/Mum/2013, read as under:- "1.The Learned CIT(Appeals)-17 erred in confirming the addition on account of disallowance of depreciation of Rs. 12,52,731/- on plant and machinery belonging to the appellant company and installed at customers premises for the business of the assessee. 2. The Learned CIT(A)-17 erred in concluding that the appellant was unable to adduce any evidence to show that the machines were part and parcel of its block of assets,....