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TMI Blog1985 (5) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... ctivity during the relevant previous year; (ii) The ITO had allowed an expenditure of Rs. 12,912 on repairs of plant and machinery although the assessee's factory did not run and especially because the machinery on which the repairs where carried on do not belong to the assessee; and (iii) The ITO had failed to consider whether amounts totalling Rs. 18,97,859 appearing in the assessee's account books as security deposit in respect of gas cylinders was a trading receipt. The ld. CIT, therefore, directed the ITO to make a fresh assessment after proper inquiries on the aforesaid points. Feeling aggrieved, the assessee has preferred this appeal. 3. We have heard the ld. counsel for the assessee and the ld. Departmental Representative. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt on all the three points and, therefore, it has to be deemed to have been made without making any inquiry and an order made without property inquiry can properly be said to be erroneous and prejudicial to the Revenue. 6. We have given our careful consideration to the respective arguments on either side and have perused the record. The ld. Departmental Representative relied upon the observations of the Hon'ble Karnataka High Court in Thalibai F. Jain vs. IT (1975) 101 ITR 1 (Ker). In that case the ITO had completed the assessment of a lady without any inquiry. The Hon'ble Court found that the assessment of a lady without any inquiry. The Hon'ble High Court found that the assessment was made without inquiry and in under hats. The CIT's vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of depreciation amounting to Rs. 16,13,955 allowed on gas cylinders. The assessee is a manufacturer of oxygen gas which is compressed into gas cylinders. The assessee is a manufacturer of oxygen gas which is compressed into gas cylinders. The gas cylinders are therefore, used as containers for the gas. The CIT's observation is that since the assessee's factory for the production of the aforesaid gas, did not work during the relevant previous year, depreciation on cylinders could not be allowed. The assessee's contention, on the other hand, is that the cylinders were actually used by it in its business, although they were filled by the assessee by purchasing the gas from another manufacturer, M/s. Amrit Vanaspati Company Private Limited, Gaz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee was using the gas manufactured by M/s. Amrit Vanaspati Company and it was at their plant that the assessee's gas cylinders were filled. If the assessee was using the plant and machinery belonging to Amrit Vanaspati Company for its own business, it could legitimately spend money on the repairs of that plant and machinery. The ld. CIT has not even found that there was nay obligation on Amrit Vanaspati Company to recoupe the expenditure. Since as is evident the plant and machinery belonging to Amrit Vanaspati Company was being used by the assessee and it is not doubted that the amount in question was a genuine expenditure on the repairs of that plant and machinery, the allowance of the expenditure cannot be doubted. The ld. CIT has f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the material differences. The ld. Departmental Representative also relied on this ruling in the same fashion. In that case the assessee was a manufacture of a country liquor which was sold in bottles. As the report shows besides the price of the liquor and the bottles in which liquor was sold, a further charge called 'empty bottles return security deposit' was collected by the assessee from its customers. It was held that the amount received on account of the alleged security deposit, were trading receipts and were taxable as such. This was held on the ground that the liquor as well as the bottles were sold and there was no obligation on the purchaser to return the bottles. As is evident, that was as case in which the value of the commo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lling from other Gas plant by the purchaser then he shall be liable to pay a penalty (a) Rs. 150 per cylinder per filling or as fixed by the seller. 4. Charges for damages shall be payable by purchaser as under: Value Rs. 75 each. Spindle Rs. 10 each. Cap Rs. 20 each. Gland-nut Rs. 5 each. 5. The condition of cylinder can only be adjudged in the premises of the factory of the sellers as and when the cylinder reaches the factory damage charges will be intimated to the purchaser who will be liable to pay as per clause 3 given above 6. Sellers reserve the right to alter, amend the conditions enumerated hereunto. 7. You will not take any security, loan, advance payment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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