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TMI Blog2013 (6) TMI 524X X X X Extracts X X X X X X X X Extracts X X X X ..... a machinery has been used, for any period in a financial year for the purposes of the business of the assessee, then the assessee is entitled for the depreciation u/s.32(1). Thus whether the machinery is rented out or not had no consequence on the allowance of depreciation which had fallen within the block of assets for the year under consideration and for a part period used towards the business purposes. As per the provisions of section 57 an assessee is entitled for deduction in respect of "income from other sources" which includes deduction u/s.32 of the Act. Since in the present case, the hiring of the machinery was considered as "income from other sources" within the ambits of section 56 of the Act, therefore in consequence thereupo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore the AO has made an observation that the asset being not used for the purposes of assessee's own business, therefore on the said machinery a proportionate disallowance of depreciation should be made. The AO has computed proportionate disallowance of depreciation as follows:- "The assessee was asked to provide details of it but he failed to provide copy of agreement of hire, bifurcation of assets given on hire and the time period for which the assets are given on hire. In the absence of it, the total WDV of machinery given on hire, duration of hire cannot be ascertained. As the assessee has claimed depreciation on part of plant machinery not used for its own business the same should be disallowed. The calculation of depreciation is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted factual position is that the assessee is in the business of construction of long distance oil and gas pipelines. We have been informed that as per the block of assets, the total WDV was at Rs.7,68,36,098/- on which the total depreciation was claimed at Rs.83,86,597/-. We have further been informed that the assessee has given on hire JCB machines, cranes, pipe layers and earned hire income. Further, we have been informed that for part of the year those machineries were hired out. The AO's allegation was that as per section 32 of IT Act, for the purpose of claim of depreciation the machinery should be used for the purposes of the business of the assessee. Since the income on hiring of machinery was not the business of the assessee, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e allowance of depreciation on the machinery which had fallen within the block of assets for the year under consideration and for a part period used towards the business purposes. 5.1. There is an another angle to resolve this controversy. As per the provisions of section 57 of the Act, an assessee is entitled for deduction in respect of "income from other sources" which includes deduction u/s.32 of the Act. Since in the present case, the hiring of the machinery was considered as "income from other sources" within the ambits of section 56 of the Act, therefore in consequence thereupon the assessee is entitled for claim of deduction as prescribed u/s.57(ii) of the Act which provides deduction u/s.32(i) of the Act. Hence, the claim of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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