Law:

Section:

Section 32 of the Income-tax Act, 1961 - Depreciation - Allowance/Rate of - Assessment year 1993-94 - Assessee-company claimed to have installed and put to use a bio-gas plant in May, 1992 and claimed depreciation thereon - Assessing Officer, however, restricted its claim of depreciation thereon to fifty per cent on ground that it was put to use for less than 180 days, i.e., only from 9-10-1992 - On second appeal, Tribunal, after exhaustive reference to records, accepted assessee's claim in full - Whether word 'used' should be understood in a wide sense so as to include passive as well as active user - Held, yes - Whether since plant in question was installed and commissioned in May, 1992, but on account of certain leakage during trial runs, repairs had to be carried out and regular production started in October, 1992, Tribunal was correct in holding that plant was put to use in May, 1992 - Held, yes Words and phrases : 'used' as occurring in section 32 of the Income-tax Act, 1961 FACTS The assessee-company installed and put to use a bio-gas plant in May, 1992 and claimed depreciation thereon accordingly. The Assessing Officer, however, restricted its claim to 50 per cent on the ground that the said plant was commissioned and put to use for less than 180 days, i.e., only from 9-10-1992. On appeal, the Commissioner (Appeals) upheld the impugned order. On further appeal, the Tribunal, after examining the documents on record, recorded a finding that the plant was installed and put to use in May, 1992, but during trial runs, it developed some leakage and other problems, and that the said problems, was subsequently solved and it started functioning regularly in October, 1992 and, thus, allowed the assessee's appeal. On revenue's appeal: HELD The Tribunal after exhaustive reference to the records (correspondence, bills and other documents) had recorded a finding of fact that the installation and use was from May, 1992. The finding might not, therefore, call for interference. [Para 3] It is well settled that the word 'used' in section 32 should be understood in a wide sense so as to include passive as well as active user.[Para 5] It was not in dispute that the plant…

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