2019 (4) TMI 60

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....ch, 1994. Clause 5, 6, 7 and 9 of the said agreement are very important. They are set out hereunder : 5. The consideration for such sale shall be Rs. 4.10 crores. Out of the aforesaid consideration of Rs. 4.10 crores the purchaser has agreed to pay 20 lakhs by way of advance within 30 days from the date of execution of these presents and the balance sum shall be paid at the time of sale and/or actual handing over of the plant, machinery, equipment and other movables as set out in Schedule II hereunder written. 6. Subject to Clause 5 above, all statutory liabilities of the employees, namely Provident Fund, and S.S.I and S. Tax upto the date of take over shall be on account of the Vendor and paid by it and such liabilities b....

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....s would be utilized by the purchaser, at the request of the vendor, "for the purpose of payment of outstanding wages and other dues of the workmen of the said jute mill as quantified in Clause 7 hereinabove". The case of the revenue is that no depreciation can be claimed on Rs. 3.90 crores because that was utilized for the payment of the workers' liabilities of the vendor. This payment could never be classified as capital expenditure and that no depreciation can be claimed under Section 32 of the said Act, Mr. Drolia submits. It seems that the assessee company, Hooghly Mills Company Limited had different sets of agreements or arrangements for purchase of undertaking plant, machinery etc. In one of such matters, Commissioner of Income ....