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2006 (11) TMI 150 - KARNATAKA HIGH COURT
Entitled for the claim of depreciation u/s 32, when the machinery are kept ready for use? - machinery being actually used or employed in the earning of income - HELD THAT:- The Calcutta High Court in CIT v. Oriental Coal Co. Ltd.[1994 (1) TMI 82 - CALCUTTA HIGH COURT], also noticed Liquidators of Pursa Ltd. v. CIT [1954 (2) TMI 1 - SUPREME COURT] and thereafter it ruled that under sub-section (1) of section 32 there should be actual user of plant and machinery for the purposes of business.
The Bombay High Court in Dineshkumar Gulabchand Agrawal v. CIT[2003 (1) TMI 19 - BOMBAY HIGH COURT], has ruled that the word "used" in section 32 of the Income-tax Act, 1961, denotes that the asset has been actually used and not that it is merely ready for use. The expression "used", means actually used for the purposes of the business. A special leave petition filed against the said judgment stood dismissed.
We are of the view that the kept ready theory is not available to the assessee for the purpose of claiming depreciation when the Legislature has chosen to use the word "used" we have to give a full meaning to it and avoid reading something not intended by the Legislation. After all, these benefits are provided for certain purposes. That purpose is used in terms of the statute. If the machinery is not used, section 32 is not applicable and hence, the assessee cannot have any benefits, if granted would result in reading something which is not provided in the statute in terms of section 32.
In the result, we accept the contention of Sri Indra Kumar, learned counsel and accept this appeal. In the result, the following order is passed. The appeal is accepted. The questions of law are answered in favour of the Revenue.