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2005 (9) TMI 587 - AT - Income TaxClaim for depreciation on plant and machinery - Disallowance made by the AO's out of stock written off on account of obsolescence - HELD THAT:- In the present case, there was lock out and strike for five years and the plant and machinery was not put to use as there was admittedly no manufacturing activity. The depreciation could not be allowed on such non-use in view of the clear verdict of the hon’ble Bombay High Bombay High Court in Dineshkumar Gulabchand Agrawal v. CIT [2003 (1) TMI 19 - BOMBAY HIGH COURT] and the hon’ble Calcutta High Court in CIT v. Oriental Coal Co. Ltd.[1994 (1) TMI 82 - CALCUTTA HIGH COURT], which is directly on the point. Further, by merely including an item in the block, will not make it eligible for the depreciation if other conditions for allowability of the claim are not satisfied. Similarly, the Income-tax Appellate Tribunal is not bound to follow legally incorrect decision of the Assessing Officer taken in other years. We respectfully prefer to follow the same on the issue. Hence, we reverse the order of the CIT (A) on this point and restore that of the Assessing Officer. This ground of the Revenue is, therefore, allowed. The limited issue involved in the second ground is whether 50 per cent. disallowance made by the Assessing Officer out of stock written off on account of obsolescence and allowed by the CIT (A) is justified. The Assessing Officer disallowed the “written off” by 50 per cent. on estimate basis. The assessee had claimed it, as stock had become unusable due to strike/lock out. The CIT (A) allowed the entire claim on the ground that factum of obsolescence has been accepted by the Assessing Officer by at least allowing 50 per cent. of the claim. Then there was no reason why the entire claim should not have been allowed. Before us, the ld DR could not point out why only half the claim was allowed and not full. The assessee has a justification to write off the stock because there was strike/lock out. Therefore, we do not find any reason to interfere in the order of the CIT (A) on this ground. This ground of the Revenue is therefore rejected. In the result, the appeal of the Revenue is partly allowed.
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