2009 (3) TMI 91

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.... of leasing. It purchased breakers from M/s. Asia Brown Broevery Ltd. and leased out the same to M/s. Tata Electric Company Limited. The assessee claimed depreciation amounting to Rs.25,25,889/-. Tata Electric Company Limited had installed the said breakers in July, 1990. In other words, not in the financial year 1991-92. The A.O.  on this basis disallowed the depreciation by rejecting the contention of the assessee that the breakers were given on lease before the end of previous year and therefore, the same should be considered as "used" for the purpose of business. 3. The A.O. disallowed the claim for depreciation on the ground that the asset in question was neither installed nor put to use in the previous year and consequently the ....

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....ing cost of asset employed in the business during the useful life of each asset. Thus the user of asset is not the only aspect which governs the allowance of depreciation. However, for the purposes of the Income Tax Act, user of the asset is required for claiming depreciation. 5. At the hearing of this appeal, on behalf of the parties, the learned counsel have reiterated their respective contentions and have also relied on various judgments in favour of their respective contentions. From the facts on record it is clear that the business of the assessee is of leasing. The Lessee had given assets on lease, in the previous year and had received the lease rentals. Would the act of the lessee in giving the assets on lease amount to use of the ....

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.... motor car is acquired by the assessee after the 28th day of February, 1975 (but before the 1st day of April, 2001), unless it is used -  (i) in a business of running it on hire for tourists; or (ii) outside India in his business or profession in another country; and (b) any machinery or plant if the actual cost thereof is allowed as a deduction in one or more years under an agreement entered into by the Central Government under section 42." 7. In Commissioner of Income Tax Vs. Shaan Finance (P) Ltd. 231 ITR 308, the Supreme Court was considering whether in a case where the business of the assessee consisted of hiring out machinery, the assessee would be entitled to investment allowance as set out under Section 32(A) of the Act. T....

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....see itself should use the machinery for the purpose. On the comparison of the language used in Section 32A and 32, the same is in para materia, Ordinarily considering that the words appear in the same chapter as far as possible the same meaning should be assigned unless the context otherwise requires.  In Shaan Finance (supra) therefore, the test used by the Supreme Court is not actual use of machinery but the test is in the context of business of the assessee and whether it is used for the purpose of business. 8. The learned counsel for the assessee also had placed before us the judgment of the Madras High Court in Commissioner of Income Tax Vs.First Leasing Co. of India Ltd. 216 ITR 455. The issue there was whether the assessee was....