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TMI Blog2011 (3) TMI 620X X X X Extracts X X X X X X X X Extracts X X X X ..... t abandon its business but suffered loss for such a state of affairs prevailing in that State over which he had no control with an expectation of resuming the business - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... ee filed its return on 30th December, 1992 showing loss for the year at Rs.88,93,265/-. In response to a notice under Section 143(2) of the Act, the assessee appeared. The assessee claimed depreciation in the computation of income to the extent of Rs.42,99,917/-. The Assessing Officer disallowed such depreciation on the ground that as the operation of the factory remained suspended during the year, the assessee was not entitled to claim depreciation. Being dissatisfied, the assessee preferred an appeal before the CIT (Appeals). The CIT (Appeals), however, affirmed the order of the Assessing Officer disallowing the claim of depreciation on machinery and plant. Being dissatisfied, the assessee preferred an appeal before the Income-tax Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of Commissioner of Income-tax vs. Oriental Coal Co. Ltd. relied upon by Mr. Agarwal, the assessee himself declared lock out of the factory indicating that he had no intention to run the business and in that context, a Division Bench of this Court held that the machinery was not open to use. Mr. Khaitan contends that in this case, the plant and machinery were ready for being used but for the law and order situation over which the assessee had no control, the machine could not be operated. Mr. Khaitan in this connection places strong reliance upon a Division Bench decision of this Court in the case of Commissioner of Income-tax vs. Union Carbide (I) Ltd. (2002) 290 ITR 353 and contends that the word "used" occurring in Section 32 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our opinion, the word "used' appearing in Section 32(1) of the Act should be given a reasonable meaning. By introducing the said provision, the legislature wanted to give the benefit of depreciation of the plant and machinery purchased by the assessee and used for the purpose of business. The word "used' should be interpreted to mean a situation where the machineries which are required for implementing the nature of business the assessee runs, have been kept ready for use for the above purpose. In other words, if the assessee purchases a machine which is not required at all having regard to the nature of the business carried on by the assessee, he will not be entitled to the benefit of depreciation because the said machinery is not meant fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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