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2008] 306 ITR 114 [2009] 178 TAXMAN 442 (MAD.) HIGH COURT OF MADRAS Siv Industries Ltd. * v. Deputy Commissioner of Income-tax K. RAVIRAJA PANDIAN AND MRS. CHITRA VENKATARAMAN, JJ. TAX CASE (APPEAL) NO. 313 OF 2004 OCTOBER 29, 2007 Section 32 of the Income-tax Act, 1961 - Depreciation - Allowance/Rate of - Assessment year 1993-94 - Whether expression 'put to use for 180 days' cannot be interpreted to mean as 'exploited for 180 days' but it would comprehend those cases also where machinery has been kept ready by owner for its use in business and failure to use it actively in business has not been, on account of its incapacity for being used for that purpose or its non-availability - Held, yes - In original assessment, Assessing Officer had allowed depreciation in respect of a new unit belonging to assessee - Commissioner, in exercise of powers under section 263, set aside assessment order on ground that machinery pertaining to said unit had actually worked for 112 days starting from 28-9-1992 to 31-3-1993 and, therefore, as per proviso to section 32, claim of depreciation should have been restricted to 50 per cent of normal depreciation - On appeal, Tribunal upheld view of Commissioner - Whether starting from date of first user of machinery, i.e., 28-9-1992 till 31-3-1993, block of assets had been used for more than 180 days, and, therefore, assessee would be entitled to full depreciation in respect of said assets - Held, yes Words and phrases 'put to use for 180 days' as occurring in proviso to section 32(1) of the Income-tax Act, 1961 FACTS While framing the assessment of the assessee-company for the relevant assessment year, the Assessing Officer had allowed depreciation in respect of an export-oriented unit belonging to the assessee. The Commissioner, on going through the records, found that the machinery pertaining to the said unit had actually worked for only 112 days starting from 28-9-1992 to 31-3-1993 and, therefore, as per proviso to section 32, depreciation on said machinery ought to have been restricted to 50 per cent. Therefore, he, in exercise of powers under section 263, set aside the assessment order and directed the Assessing Officer to restrict…

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