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TMI Blog2002 (2) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... the depreciation and the investment allowance, two units of the assessee were under review. One was at Jammu and Kashmir and another at Hyderabad. On the basis of the director's report, the Commissioner of Income-tax (Appeals) found that the plant at Srinagar had gone into trial production during the assessment year, although not into commercial production. The said Commissioner, however, did not take a similar view with regard to the Hyderabad unit. On a further consideration of the facts before the Tribunal, however, the Tribunal came to the conclusion that even with regard to the Hyderabad unit, the machinery installed there had gone into trial production although not, once again, into comercial production. The question of law raised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the Tribunal and those are as follows: CIT v. Kanoria General Dealers (P.) Ltd. [1986] 159 ITR 524 (Cal); V. Ramakrishna and Sons Ltd. v. CIT [1984] 149 ITR 554 (Mad) and CIT v. Vayithri Plantations Ltd. [1981] 128 ITR 675 (Mad). In addition, he gave us the Delhi case Capital Bus;Service (P.) Ltd. v. CIT [1980] 123 ITR 404. Although the cases are many in number yet, as quite often happens none exactly fits the facts of our case. It is one thing for machinery to wait passively during the year in question, ready to come into use commercially at any time although it might actually not have been used, because the running units ran perfectly, but this is not the same thing as plant or machinery which is being brought up to the stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en and in that event, the assessee establishes the assessee's right to claim depreciation. In regard to investment allowance, the language in section 32A requires that the machinery or plant in question "which is owned by the assessee"... "is wholly used for the purposes of the business" and further that the "machinery or plant is first put to use in the immediately succeeding previous year". If these two conditions are satisfied, investment allowance as per section 32A can be claimed. About the ownership by the assessee in regard to both the Srinagar and Hyderabad plants, no dispute arose before US. As to whether the machinery was first put to use in the previous year in question, also, there was no dispute. The dispute before us r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of its business, because it has no business as yet. Even in the cases referred to above this idea can be seen to be present in some places. But so far as the present assessee is concerned, it has had its business long running, and Srinagar and Hyderabad, were only two places of expansion of the assessee's business. The assessee did not have one assessment for Srinagar, another for Hyderabad and yet another for other places, but the assessment was one. Thus, trial production is quite sufficient, in our opinion, for the assessee to claim justly and properly both depreciation and investment allowance. The decision of the Tribunal is accordingly quite right in point of law. The question referred to us is answered in the affirmative, i.e., i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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