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2016 (1) TMI 1185 - AT - Income TaxDepreciation claim on machineries - Held that:- Assessee offered an explanation, with regard to the installation of machinery, that these are ready to use plug in kind of machinery and does not require any long procedure of installation. The Assessing Officer has nowhere in his order been able to prove this explanation of the assessee to be wrong. He just brushed aside this explanation and made his own assumption with regard to the procedure of installation. As per the Assessing Officer, the machinery after being delivered in the premises of the assessee, need to be unloaded, unpacked and taken to desired spot. Thereafter electronic boards and other accessories need to be fitted apart from other adjustments, which may require a long time. The averment of the AO is not backed by any documentary evidence and in view of the fact that the explanation of the assessee as to the machinery being ready to use being not disproved by the Assessing Officer. No reason for the Assessing Officer to find that the machinery was not installed as on 31.3.2005. If the Assessing Officer had any apprehension with regard to the said explanation of the assessee, he could have gone ahead and make further enquiries, rather than assuming himself the procedure for installation. In view of this, we do not find ourselves in agreement with the action of the Assessing Officer in disallowing the depreciation on these machines. The Assessing Officer is hereby directed to allow the assessee the depreciation on the said machines as per law. Depreciation @ 15% on electrical installation as against 25% claimed by the assessee - Held that:- In view of the fact that the claim of the assessee that these electrical installations were a part of the plant & machinery, was not properly examined at any stage neither before the Assessing Officer nor before the learned CIT (Appeals). We think it fit to send the matter back to the file of the Assessing Officer to verify whether these installations are part of plant & machinery or not. The assessee is free to adduce any evidence which it deems fit on this issue and the Assessing Officer is hereby directed to give a clear finding whether these installations are part of the plant & machinery. If it is so, depreciation @ 25% is to be allowed, otherwise depreciation only to the extent of 15% is to be allowed.
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