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TMI Blog2002 (2) TMI 329X X X X Extracts X X X X X X X X Extracts X X X X ..... and the assets were not put to use. The AO relied upon the judgment in the case of CIT vs. Suhrid Geigy Ltd. (1981) 25 CTR (Guj) 280 : (1982) 133 ITR 884 (Guj). The CIT(A) held that no business was done in the branch office. Machinery was not used even for a single day. Therefore, the claim of depreciation was not allowed by him. 3. The learned authorised representative submitted that the learned CIT(A) erred is not considering the appellant's written submissions properly and not appreciating the fact that the machine was ready for use and could not be used for lack of orders. Due to amendment in Rajasthan ST Act, total sales-tax exemption had been given to newly set up industry and in view of total sales-tax exemption, the society's oil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the appellant's case, the commercial production has commencing long back, the oil mill was running in the immediately preceding year, i.e. asst. yr. 1990-91 and it also worked in the preceding year, i.e., asst. yr. 1992-93. It was only for the asst. yr. 1991-92 that the oil mill had not worked for the reason already mentioned. 5. It is well settled law that when there are decisions in favour of both the Revenue and the assessee, the one which is favourable to the assessee will prevail. 5.1. The learned Departmental Representative relied upon the orders of the authorities below. 6. We have considered the rival submissions. We have perused the case laws on the subject cited by the AO and the learned authorised representative. In order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses cannot be allowed as these expenses were not incurred for earning income because of stoppage of business. 8. The learned authorised representative submitted that the expenses had been incurred wholly and exclusively for the purpose of business. The details of expenses are as under: Rs. 1. Electricity : 70,266 2. Majoori : 18,802 3. Insurance : 14,711 4. Salary : 28,012 5. Bonus : 2,730 6. Interest : 1,31,040 It was submitted before the CIT(A) that the business of oil mill had not completely been stopped. The mill had worked in the succeed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained for upkeep of machinery. It was also submitted that though the expenses incurred on salary of employees had been debited in the P L a/c of oil mill but their services had been utilised in head office also. The expenses cannot be disallowed merely because the activity of oil mill branch is different from the activity of the head office. It does not imply that branch office and head office are separate business centres. The oil mill is only a branch and does not constitute a separate business. There is complete unity, interlacing and inter-dependence of management and financial aspects between head office and branch oil mill. There is one general manager who controls and administers both the head office and branch office. There is inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucing units. Secondly, the AO has cited examples of private run unit and not of Government run unit. There is always difference of profitability between private and Government run units. Private run units are generally more profitable. 11. We have considered the rival submissions. We find that there was a lull in the business of oil mill (branch office). The assessee had to stop functioning of oil mill due to specific reasons already discussed in the order. The oil mill had functioned during the succeeding as well as preceding assessment years. In order to continue the business in branch office, the assessee was required to incur fixed expenses which were essential for continuation of business. Secondly, the oil mill is a branch office an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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