TaxTMI 
TaxTMI 
2021 (3) TMI 191
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....above appeal. 2.1 The assessee company M/s. Lakshmi General Finance Limited got merged to M/s. Sundaram Finance Limited. The assessee filed its return of income for the assessment year 1999-2000 admitting total income of Rs. 12,29,89,250/-. The return was processed under section 143(1a). Subsequently, a revised return was filed on 15.03.2001 reducing the total income to Rs. 10,72,87,110/-, which was processed under section 143(1a). Thereafter, the assessment was reopened under section 147 on 21.03.2003 in order to disallow excess depreciation claimed by the assessee and the reassessment was completed on a total income of Rs. 12,61,91,570/;- . The assessment was again reopened under section 147 on the basis of fresh information about excess....
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....sessing Officer. Challenging the order passed by the Income Tax Appellate Tribunal, the Revenue has filed the above appeal. 3.The appeal was admitted on the following substantial question of law: " Whether on the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the assessee was entitled to claim depreciation on the windmills even though the wind mills had not generated any electricity during the previous year and thus there was no user of the asset for the purpose of the business of generation of power?" 4. Mr. Venkatanarayanan, learned counsel appearing for the respondent submitted that the issue involved in the present appeal is covered by the decisions of the Hon'ble Division Bench ....
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....ricity which was generated was only 0.080 units. This, according to the assessing officer, is insufficient as it can be considered only as a trial run, but actual generation of electricity took place much after 31.3.2005. The Tribunal concurred with the findings of the Assessing Officer, but had referred to the aforementioned four decisions. In our considered opinion, all the four decisions cannot be applied to the facts of the present case. 6. In the case of "B.Malini and Co., -Vs- CIT (1995) 214 ITR 192 (Bom), there was a gap of one clear previous year between installation of machinery and its usage and hence it was held that no depreciation can be claimed. In "The Deputy CIT -Vs- Yellamma Dasappa Hospital (2007 290 ITR 353 Kar), the Co....
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.... whole of the assessment year in question. The term used in Section 32(1) is "owned by assessee", but that does not bring in a requirement that the assessee should have remained the owner of the asset in question for the entire previous year in question. The object of the Legislature, in granting depreciation allowance under Section 32 of the Act, is to give due allowance to the assessee for wear and tear suffered by the asset used by him in his business so that the net income (total income) is duly arrived at. There is no factual dispute that the assets in question were owned by the assessee. In Machinery Manufacturers Cororation Ltd. v. CIT[1957] 31 ITR 203 (Bom), it was observed that the expression "used" in Section 10(2)(vi) of the Indi....
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.... Taxmann.com 421 (Punjab & Haryana)", the machinery which was kept ready for use was held to qualify for depreciation under Section 32 of the Act. 9. The above decisions will clearly show that even trial production machineries kept ready for use etc., were considered to be used for the purpose of business to qualify for depreciation. In "CIT -Vs- Geo Tech Construction 244 ITR 452 (Kerala)" , the machinery which was purchased by the assess from Pondicherry was yet to reach work site at Kochi and were in transit, and the Court held that it would amount to passive use and would qualify for depreciation. Thus, we are of the considered view that the Tribunal erred in reversing the order passed by the CIT (Appeals). For all the above reasons,....