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Issues Involved:
The issues involved in the judgment are: 1. Entitlement to depreciation on tippers. 2. Grant of depreciation based on passive user of asset. Entitlement to Depreciation on Tippers: The assessee purchased two tippers and claimed depreciation for the assessment year 1986-87. The Assessing Officer disallowed depreciation stating lack of evidence that tippers were put to use before March 31, 1986. The Commissioner of Income-tax (Appeals) upheld the disallowance as there was no proof of tippers being used before the specified date. The Tribunal noted that tippers were purchased with fully built bodies and ready for use. Despite doubts on their arrival at the work site, the Tribunal allowed depreciation based on the principle of passive user, considering the time margin for tippers to reach the site. The Revenue argued for material proof of tippers being ready for use at the work site, while the assessee contended that the tippers had reached the site by March 30, 1986. The Tribunal's conclusion on passive user and actual use of assets was deemed irreversible, leading to the allowance of depreciation. Grant of Depreciation Based on Passive User of Asset: Section 32 of the Income-tax Act deals with depreciation, aiming to compensate for wear and tear of assets used in business. The term "used" includes both passive and active user, as observed in previous cases. Depreciation is essential to reflect the true profits by considering asset deterioration over time. Factors contributing to depreciation include wear and tear, damage, inadequacy, and obsolescence. The Tribunal's decision to allow depreciation was based on the asset being owned by the assessee and used for business purposes, meeting the statutory requirements. Despite the Revenue's claim of lack of evidence on asset presence at the work site, the Tribunal's factual analysis and consideration of normal time for asset movement supported the concept of passive user. Consequently, the Tribunal's view was accepted, and the questions were answered in favor of the assessee against the Revenue.
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