Law:

Section:

Section 32 of the Income-tax Act, 1961 - Depreciation - Assessee stopped manufacturing chemicals due to losses and let, out part of factory premises after dismantling machinery - Subsequently assessee started manufacturing at different place with old machinery - Whether depreciation and unabsorbed depreciation of earlier years brought forward and certain other expenses could be allowed in the intervening period - Held that since the business was discontinued and it was not lull period, neither depreciation could be allowed nor unabsorbed depreciation brought forward could be set off; however, the expenses in so far as were referable to holding of the assets could be allowed FACTS The assessee-company's business of manufacturing bichromates and its by-products was commenced in 1946. Because of the financial difficulties, the assessee-company mortgaged its assets to Industrial Finance Corporation for funds which ultimately refused to provide further funds in 1955. The assessee-company stopped manufacturing activities and leased out portions of its premises after dismantling the plant and machinery. Then the assessee-company obtained loan from Bombay Hospital Trust on mortgage of its land and buildings and paid off the amounts due to Industrial Finance Corporation. Thereafter, in August 1967, the assessee established a plant at Bhilai after shifting a part of its machinery there. The Director's annual reports during this period reflected the bad financial position of the assessee and mentioned that the assessee-company closed down the business in December 1954 and tried to sell off its entire land and buildings. One of the reports also mentioned that the plants and machinery were dismantled with the intention of restarting production elsewhere after securing site and finance. Another report said that depreciation on fixed assets was not charged to the Profit and Loss Account as the factory was closed and the fixed assets were not used. Another report said that it would expand and let out Mahim property to enhance rental income. In the assessment years 1959-60 to 1962-63, the ITO disallowed the assessee's claim for certain deductions, depreciation and disallowance…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492