2006 (8) TMI 610

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..... levant for the assessment year 2001-02. 2. The assessee is a company engaged in the business of manufacturing chemicals. For the year under consideration it declared a loss and also claimed depreciation to the tune of ₹ 32,83,710. The Assessing Officer was of the view that the claim for depreciation could not be allowed since there was no manufacturing activity carried on by the assessee .....

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..... hy the revenue has filed this appeal under section 260A of the Act. 5. The Tribunal has noted that during the relevant previous year the assessee had addressed letters to at least three parties, one in Spain and two in India. In terms of this correspondence, it appears that the assessee was willing to supply chemicals to these parties in the relevant previous year against specific orders but ne .....

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..... it was unable to do so. 7. In Capital Bus Service (P.) Ltd. v. CIT [1980] 123 ITR 4041, this Court reviewed the entire case law and concluded that the consensus of opinion was in favour of adopting a liberal interpretation to the word used as appearing in section 10(2) of the Income-tax Act, 1922 which corresponds to section 32(1) of the Income-tax Act, 1961. This being the position, it would .....

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