9911796707
TMI Blog2008 (7) TMI 1002X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed. The facts of the case are that the assessee is engaged in the business of manufacturing glue flakes from bone sinews and fluff. Vide order dated 31.3.2003, the Assessing Officer completed the assessment for the assessment year 2000-01 at an amount of ₹ 99,19,480/-, by making various additions. The issue before us pertains to disallowance of depreciation amounting to ₹ 1,76,254/-, out of the depreciation of ₹ 2,59,198/-, as claimed by the assessee on account of use of boiler. The Assessing Officer disallowed the depreciation, while recording a finding that the said boiler was also used by M/s Protinkem and M/s P.B.M. Gelatine (P) Ltd., Jalandhar, the sister concerns of the assessee. The Assessing Officer, while ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , which the Assessing Officer may determine having regard to the user of such building, machinery, plant or furniture for the purposes of the business or profession. The learned CIT (A), is seen, is rather gone at a tangent form the findings arrived at by the Assessing Officer. The issue of disallowance under section 38 (2) of the Act has not at all been able to repel the findings arrived at by the Assessing Officer. The case is directly covered by the provisions of section 38 (2). Therefore, we hereby uphold the findings of the Assessing Officer. Against the aforesaid order of the ITAT, the assessee has filed the instant appeal, raising the following two substantial questions of law for consideration of this Court : (1) Whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce has been made in respect of depreciation of boiler, diesel generator set and electric installation. Learned counsel further submits that admittedly, there was no evidence before the CIT (A) that the assessee has sold the surplus steam and earned the income, therefore, he was not justified in adding the same in the income of the assessee. Hence, the issue of selling the surplus steam was not before the Assessing Officer and he made the disallowance in accordance with provisions of Section 38 (2) of the Act and the ITAT was fully justified in setting aside the order of the CIT (A). Section 32 of the Act provides for certain depreciations in respect of buildings, machinery, plant or furniture, being tangible assets, which are wholly or p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a fair proportionate part thereof, which the Assessing Officer may determine having regard to the user of such building, machinery, plant or furniture for the purposes of the business. In the instant case, the Assessing Officer has held that the boiler has been used by the sister concerns of the assessee to the extent of 68%. Thus, the expenses amounting to ₹ 1,76,257/- were not allowed to the assessee. The judgments cited by learned counsel for the assessee are not applicable to the facts and circumstances of this case. In Punjab National Bank versus Commissioner of Income-Tax, Delhi (supra), the assessee owned a building of 6 floors, 5 of which were occupied by the assessee for the purpose of his business and the 6th floor was le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income-Tax versus Indian Express (Madurai) Pvt. Ltd. (supra), the assessee was incurring the expenditure in terms of commercial expediency was an expenditure which was required to be incurred for its business. Such expenditure must be regarded as having been incurred exclusively for the purpose of assessee's business even though incidentally a third party may also happen to be benefited by reason of such expenditure. However in the instant case expenditure was even shared by one sister concern with the assessee. Therefore, it cannot be said that the assessee has used the boiler exclusively for the purpose of its business. In view of the above, we are of the opinion that in this appeal, no substantial question of law is arising fr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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