2006 (9) TMI 168

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....Appellate Tribunal was right in law in coming to the conclusion that the debt raised from the bank for the purchase of plant and machinery, which remained unpaid during the accounting period, was not to be taken into account for purposes of allowing deduction under section 32AB of the Income-tax Act to the assessee ?" 2. The facts noticed in the statement of case are that the assessee claimed deduction of Rs. 67,19,890 on account of additions made to plant and machinery during the year under consideration. The Assessing Officer disallowed a part of the amount on the ground that the same was invested by raising loans. Deduction was allowed only to the extent of the assessee's own funds. The Assessing Officer noticed that the assessee had ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....t Bank before the expiry of six months from the end of the previous year or before furnishing the return of his income, whichever is earlier ; or (b) utilised any amount during the previous year for the purchase of any new ship, new aircraft, new machinery or plant, without depositing any amount in the deposit account under clause (a), in accordance with, and for the purposes specified in, a scheme (hereafter in this section referred to as the 'scheme') to be framed by the Central Government, or if the assessee is carrying on the business of growing and manufacturing tea in India, to be approved in this behalf by the Tea Board, the assessee shall be allowed a deduction (such deduction being allowed before the loss, if any, brought for....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ed independently. In case, deduction is allowed in the manner suggested by the assessee, that would amount to distortion in the determination of income for the current year and will not be in consonance with the scheme of taxation and grant of benefits. 7. In Antifriction Bearings Corporation Ltd.'s case [2000] 246 ITR 295  (Bom), the claim for deduction was in respect of advance for purchase of machinery out of profits of the year and it was held that payment of advance amounted to utilisation in accordance with the said provision, even if the assessee did not become owner of the machinery during the year. The issue involved in the said judgment is different. To the extent of income utilised during the year, the assessee has been g....