2010 (9) TMI 137

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..... here was any commercial production of coin blanks in the year in question, is also indiscernible from the records - matter needs to be remitted back to the Assessing Officer - claim of depreciation would be examined afresh.
CORAM: THE HON'BLE MR. JUSTICE A.K. SIKRI THE HON'BLE MS. JUSTICE REVA KHETRAPAL Ms.Prem Lata Bansal, Advocate Mr. Kapil Goel, Advocate A.K. SIKRI, J. (ORAL) 1. The respondent assessee is in the business of manufacturing of Turbo Chargers. Because of some compulsions, economic or market, the production of Turbo Chargers could not be carried out. However, the assessee company did not close down. In the assessment years 2002-03 and 2003-04, in the return filed by the assessee, it claimed certain expenses which wer .....

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..... both the revenue as well as the assessee preferred appeal against this order. The Tribunal has allowed the appeal of the assessee and dismissed that of the revenue by following its earlier order in respect of assessment year 2003-04. 3. In view of the categorical finding recorded that the company had never closed down its business, and these findings have been accepted in respect of earlier assessment years as well, the order of the Assessing Officer disallowing the business expenses was clearly erroneous. However, at the same time, we find that the assessee had claimed business expenses under the following head:- "Cost of manufacturing and Sales Rs.5,40,148 Sales Admn. Expenses Rs.28,20,308 Depreciation Rs.62,00,756 Preliminary exp .....

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..... the manufacturing of coin blanks. Whether there was any commercial production of coin blanks in the year in question, is also indiscernible from the records. 6. For these reasons, we are of the view that in so far as claim of depreciation is concerned, the matter needs to be remitted back to the Assessing Officer. The Assessing Officer shall proceed on the premise that the assessee carried out the business activity in the relevant assessment year. On that basis claim of depreciation would be examined afresh after ascertaining as to whether the plant and machinery meant for manufacturing of Turbo Chargers were used or not, if used, for what period and depending upon these facts, the claim of depreciation shall be determined in accordance w .....

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