Law: Income Tax Act, 1961

Section: 32,32(10

JUDGMENT R. Gururajan, J. - Revenue is before us. Assessee filed a return of income for the assessment year 1989-90 relevant for the previous year ending 31-3-1989 declaring a loss of Rs. 35,35,600. The Deputy Commissioner of Income-tax noticed that depreciation has been claimed by the respondent-assessee on several machineries. He directed the assessee to furnish the copy of the invoices of the machinery on which depreciation was claimed. From verification, it was found that the items of machinery had been purchased during the year. However, since on the admission of the respondent-assessee itself that the hospital started functioning from February/March 1989, the assessee was directed to produce evidence regarding use of machinery. No evidence was produced by the assessee. In those circumstances, the assessing authority concluded that the items of machinery on which depreciation was claimed were not put to use by the hospital and consequently he disallowed the depreciation on the imported machinery to the extent of Rs. 17,70,569 and on Indian machinery to the extent of Rs. 4,25,525 aggregating to Rs. 21,96,094 and an assessment order was passed to that effect. An appeal was filed before the Appellate Commissioner. The Appellate Commissioner directed the assessing authority to allow the further depreciation of a sum of Rs. 21,96,094 over and above what had been allowed by the assessing authority. The revenue being aggrieved by the appellate order assessee moved the Tribunal. The Tribunal upheld the claim of the assessee holding that when it is accepted that the machineries are kept ready for ruse, then in the light of the case laws relied on by the appellate Commissioner, the respondent is entitled for depreciation. It is in these circumstances, the revenue is before us. 2. The following questions of law are framed for our consideration: (a)Whether, on the facts and the circumstances of the case, the Tribunal is correct in law in holding that the respondent-assessee is entitled to claim depreciation allowance in relation to the assessment year 1989-90 as the machineries ware ready for use? (b)Whether, on the facts and circumstances of the case, the Tribunal is…

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