9911796707
TMI Blog2016 (12) TMI 937X X X X Extracts X X X X X X X X Extracts X X X X ..... tually put to use by the assessee during the year (CIT Vs. Nahar Exports Ltd. [2007 (5) TMI 171 - PUNJAB AND HARYANA HIGH COURT ] and CIT Vs. Shahbad Cooperative Sugar Mills Ltd. reported in [2011 (2) TMI 453 - PUNJAB AND HARYANA HIGH COURT ]). Also the submission of the Ld. Counsel for the assessee that the AO in the subsequent years has allowed depreciation on the plant and machinery could not be controverted by the Ld. Departmental Representative. - Decided in favour of assessee - ITA No. 1526/PN/2016 - - - Dated:- 26-8-2016 - Shri R. K. Panda, AM Appellant by : Shri M.K. Kulkarni Respondent by : Shri Suhas S. Kulkarni, JCIT ORDER Per R. K. Panda, AM This appeal filed by the Assessee is directed against the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income for the purpose of arriving at the total income of the assessee. The AO, therefore, asked the assessee to explain as to why depreciation on plant and machinery should not be disallowed. 4. It was explained by the assessee that it has neither closed its factory nor had ceased to do the business. It was submitted that though the manufacturing activity was not conducted during the relevant previous year however the plant was kept in ready condition in anticipation of the starting of the manufacturing activity as and when the market conditions improve and there was a change in commercial viability of Ethanol production. It was argued that the Government policy on Ethanol was not clear during the year 2009-10 and 2010-11 and therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also argued that though in its case there was no manufacturing activity during the year the assessee had continued the business on small scale by booking material in anticipation of orders from petroleum companies for ethanol and had also retained and maintained its plant. 5. However, the AO was not satisfied with the arguments advanced by the assessee. Relying on various decisions he held that since the company had not used its plant and machinery even for a single day during the year under consideration, the depreciation claimed by it could not be allowed. He accordingly made addition of ₹ 20,23,393/- to the total income of the assessee. 6. Before the CIT(A) the assessee more or less reiterated the same arguments as made befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part of the block of assets. 10. An identical issue had come up before the Hon ble Bombay High Court in the case of CIT Vs. G.R. Shipping vide ITA No.598/2009 order dated 20-07-2009. In that case, the assessee was engaged in shipping business and owned a barge which was included in the block of assets. The barge met with an accident and sunk on 06-03-2000, i.e. relevant to A.Y. 2000-01. As the efforts to retrieve the barge was uneconomical the barge was sold on as is where is basis for ₹ 55 lakhs in the month of May 2001 relevant to A.Y. 2002-03. As the barge was non operational and not used for business in A.Y. 2001-02 the AO denied depreciation. The Tribunal held that after the concept of Block of Asset w.e.f. 01-04-1988, indi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
