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TMI Blog2015 (5) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... . Thus it is not a case, when material or relevant evidence was not considered. That apart, it is also not the case of the appellant-revenue that the finding of fact has been arrived at by the Tribunal, relying upon the inadmissible evidence. The off shoot of the above discussion is that machine has been duly installed and was in a working condition before the end of the previous year. - Decided in favour of assessee. - ITA No. 90/2003 - - - Dated:- 12-12-2014 - MR. SANJIV KHANNA AND MR. V.KAMESWAR RAO, JJ. For The Appellant : Mr.N.P.Sahni, Sr.Standing Counsel with Mr.Nitin Gulati, Mr.Judy James, Advocates For The Respondent : Mr.Simran Mehta with Mr.Prabhat Kalia, Advocates V.KAMESWAR RAO, J. 1. In this appeal, under Section 260A of the Income Tax Act, 1961 ( Act‟ in short) filed by the revenue challenging the order dated July 15, 2002 of the Income Tax Appellate Tribunal ( Tribunal‟ in short), the following substantial questions of law fall for our consideration:- 1. Whether the finding recorded by the Tribunal is perverse? 2. Whether in the absence of any evidence to the effect that the machine was put to use before the closure of the fina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the Tribunal succeeded inasmuch the Tribunal, vide order dated July 15, 2002, held that material placed before the Assessing Officer and the Commissioner of Income Tax (Appeals) was sufficient to show that the machine was installed before the close of the year. We note below the facts as found and accepted by the Tribunal. 6. The machine namely Widia Special Six Spindle Drilling Machine was received on 24.12.1986. The foundation of the machine was already laid on 22.12.1986 in Hall No. 1 and electrical connections were completed on 27.12.1986. The machine in full working order was handed over for trying out on 29.12.1986 to the manufacturing engineering department. The Tribunal concluded as under: 13.6. We have considered the rival submissions and perused the record carefully. The material placed before the AO and CIT(A) was sufficient to show that machine was installed before the end of the financial year and it was used for trial and once this is certified by the factory manager and others then assessee was justified in claiming depreciation and we direct the AO to allow the depreciation in respect of the machines mentioned in the earlier part of the order . 7. Lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue in para j‟ in the grounds of appeal, does not contemplate that manufacturing or production should have actually commenced nor does it contemplate that the assets should be used for the whole of the assessment year. The requirement under Section 32(1) is owned by assessee which suggest that the assessee should be the owner in the previous year in question. The second requirement is that the machine should have been used. The purpose of Section 32 is to give due regard to the wear and tear suffered by the assets used by the assessee so that net income is duly arrived. 11. In Machinery Manufacturers Corporation Ltd. vs. CIT [1957] 31 ITR 203 (Bombay), it was observed that the word used in the Income Tax Act of 1922 corresponding to Section 32 of the Act of 1961, should be given wider meaning. It is settled position of law that the expression used includes passive as well as active user. This Court in the case of Capital Bus Services Pvt. Ltd. vs. Commissioner of Income Tax 123 ITR 404 (Delhi) has held as under:- Though it is true that a machinery generally depreciates with actual user, the decision indicate that it is not necessary to import this concept in int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in October 1992. The Tribunal recorded a finding of fact after examining the relevant documents that the entire equipments had been installed and commissioned and put to use in May 1992. The High Court, while dismissing the appeal of the revenue was of the view that it was not in dispute that the plant was installed in May, 1992 and records clearly shows that on installation, it was commissioned in May 1992 but on account of certain leakage during trial run, repairs had to be carried out and regular production started in October 1992. The assessee was entitled to full depreciation. Similarly, the High Court of Kerala in the case of Commissioner of Income Tax Vs. Geo Tech Construction Corporation, [2000] 244 ITR 452 on similar lines, wherein the Tribunal held that the margin of time was enough for tippers to move from Pondicherry to the work site and even if it is accepted, as was the case put up by the revenue, there was no actual user, the fact that they were kept ready for use would be enough for grant of depreciation on the principle of passive user of the asset, allowed the claim of the assessee for depreciation. Suffice to state, from the above two judgments, we note tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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