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TMI Blog2008 (10) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... his misfortune, it becomes defective and non-functional, it cannot be said that it is not put into use for the purpose of business – merely because it did not effectively function is not a ground to reject the depreciation - depreciation entitled - 143 of 2004 - - - Dated:- 16-10-2008 - K. SREEDHAR RAO and C. R. KUMARASWAMY JJ. M. V. Seshachala for the appellants. B. C. Thiruvengadam fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reciation because the machinery was installed and merely because it did not effectively function is not a ground to reject the depreciation. 2. The State is in appeal against the order of depreciation. Sri M. V. Seshachala, learned counsel for the appellants relied on the decision of the hon'ble Supreme Court in Liquidators of Pursa Ltd. v. CIT [1954] 25 ITR 265. At page 272, the following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ressed different views. It is, however, clear that in order to attract the operation of clauses (v), (vi) and (vii) the machinery and plant must be such as were used, in whatever sense that word is taken, at least for a part of the accounting year. If the machinery and plant have not at all been used at any time during the accounting year no allowance can be claimed under clause (vii) in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision cited lays down that machinery should be installed. The observation of the hon'ble Supreme Court does not deal with a situation when the machinery installed becomes defective and does not function, in such case whether it could be said that machinery was not used for the purpose of business. 6. The purport and object of law relating to depreciation as envisaged under section 32 of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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